Mesa pawn shops aim to block proposed fee

Mesa pawn shop representatives are urging the city to reconsider a proposal to charge a fee on transactions to defray police administrative costs for keeping track of stolen items. Pawn shop owners say they're heavily regulated as it is and want the city to extend the cost to other secondhand goods dealers, too, who they say fall under the radar.

"We think it's a prejudicial tax because it targets people who use pawn shops," said Fernando Pena, government affairs director for Cash America and owner of two SuperPawn stores in Mesa.

At a city meeting Monday, a public safety committee decided to take the matter to the full City Council for discussion.

Under a proposal presented to the previous council in May, the police department had suggested imposing a $3 transaction fee for each item pawned. Also, there's a proposal to increase the annual licensing fee to $1,000. The pawn shop industry is okay with a licensing fee, but wants it spread out among the city's 19 existing pawn shops and 81 secondhand dealers.

Pawn shops don't want the administrative fee, which would also help pay for an online transaction-reporting system.

In Mesa, annual transactions have increased from about 72,000 in 2003 to 123,000 in 2007.

There are two full-time police officers and one investigator in the Mesa Police Department's recovered property unit. The unit expects to spend about $337,000 this fiscal year on administrative costs. The unit checks all item transactions at pawn shops, secondhand dealers and scrap yards, among others.

Council members Dina Higgins and Scott Somers said that stolen goods may also be sold at other secondhand places, and perhaps efforts were too focused on pawn shops right now.

Walter Cheeseman, vice president of Arizona Pawn Association, said 80 percent of customers come back to pick up their items, "so 80 percent of our customers are not thieves."

"A customer has to pay Mesa $3 to check on stolen property when the property isn't stolen," Cheeseman said.

Mesa police Chief George Gascón said the department is only trying to begin the process of cost recovery with pawn shops.

"It's not our intent to say that's the only business (that gets stolen property), but we want to start somewhere," Gascon said.

Police officials note that the fee would only pay for cost recovery. According to a police report, so far this year, 90 items have been seized from Mesa pawn shops that were connected with 30 criminal cases. Phoenix charges an administrative fee already. Tempe and Chandler are also considering imposing a similar fee, officials said.

By law, pawn shop operators are required to report each transaction for a police check. Police then use data from pawn shops to track stolen items.