REGULAR MEETING OF THE CITY
OF GLOBE MAYOR AND COUNCIL
Tuesday June 27, 2017 6:00 PM
City Council Chambers - Pine Street
What if a public hearing was held, but no one came to
comment? The Mayor and Council would then move on to
other business, which was exactly what happened at last
night's regular meeting of the Globe City Council when no
one came to speak about property taxes.
Mayor Al Gameros proclaimed July 1st as the Hundred Year
Jubilee for the Our Lady of the Blessed Sacrament Catholic
Church, which celebrates 100 years of service to Miami
parishioners this Saturday.
Zoning head Chris Collopy gave a presentation on
post-Pinal Wildfire flood mitigation. There's no word yet on
the $300,000 pre-flood cleanup grant for which the county
applied last week, so public works is on standby, but most
property owners have granted easement access for clean up
crews when the work begins. There are some problems with
bigger corporate land-owners due to language in the
agreement, but Collopy predicted the issues will be resolved.
Like Miami the previous night, Globe got approval from the
Council to write a letter against another wastewater
treatment plant, supporting Miami's contention that there
was enough idle capacity at the existing Globe and Miami
plants to handle all of the Tri-City demand.
The Council also approved the acceptance of a $70,000
Freeport McMoRan grant for Besh Ba Gowah.
And approval was given to Globe's portion of funding for the
Cobre Valley Transit System. The annual budget for Fiscal
Year 2017-18 is $619,000. Globe contributes $61,000. The
budget includes $130,000 for the possible purchase of a new
bus, which would likely be covered by an ADOT grant.
The Pinal-Gila Council for Senior Citizens found some extra
money at the end of their fiscal year, and the Globe Active
Adult Center is $6,000 richer because of it.
The property lease for the newly formed club for boys and
girls was extended a month while the group finalizes its
Judge John Perlman attended the meeting to have his
annual contract in the amount of $42,164.40 approved for his
magistrate services for the upcoming Fiscal Year. The
amount is slightly higher than this year because he is
reverting to independent contractor status, which he was
before the city made him an employee, a move that has come
under scrutiny for conflict of interest. Perlman related that
when he first became magistrate, then-Mayor Terry Wheeler
said, “Don't just punish people. Make our city better.”
The Council unanimously approved the posting of a 60 day
notice to amend the model city tax code for (a) removal of
the $15,000 cap on city sales tax, and/or (b) implementation
of a city use tax. Much discussion on the cap took place.
Little mention of the use tax was made.
Udon McSpadden is adamantly against eliminating the
$15,000 sales tax cap. He finds it unnecessary and
counterproductive. Unlike many states, which tax vehicle
sales on the resident address of the buyer, Arizona taxes
them on the location of the dealer. Recognizing that this
creates an un-level playing field, Globe waived its portion of
sales taxes on any amount over $15,000. Dealers like
McSpadden Ford operate on a very close margin. In fact, the
additional purchase cost if full taxes are levied might well be
greater than McSpadden's profit. Therefore, it would not be
possible for the dealership to lower its selling price to make
up for the increase in cost because of the tax.
McSpadden Ford has spent a great deal of money advertising
for distant buyers, both fleet and individual purchase. The
only lure to get out of town people to buy in Globe is
because they'll save money. Eliminating the tax cap would
negate that benefit. It would also cause local buyers to
comparison shop out of town. And due to the state mandate
that municipalities can not favor local bidders, it's entirely
possible it would cause local governments to be forced to
purchase vehicles elsewhere.
More frustrating is the notion that an increase in tax will
result in greater money to the city. Research repeatedly has
shown that raising taxes lowers purchasing. When
purchasing declines, tax revenue declines. The contention
that Globe is missing out on $90,000 a year in tax revenue
because there is a cap belies reality. If the cap is lifted, there
won't be sufficient sales to result in an additional $90,000 in
tax revenue. It might even lead to a decline.
In addition to the increased sales McSpadden Ford attributes
to the incentive of lower taxes (75 vehicles last year, 44
already this year), there's a big community benefit to the cap.
McSpadden is able to hire more workers. The staff is up to
31 people, from 17 a few years ago. A lot of money went
into renovating McSpadden's building and lot on Highway
60, which also benefitted local contractors. The dealership
would have been unable to do any of that without sufficient
sales to generate the necessary revenue.
Councilmember Lerry Alderman asked McSpadden to
supply data on sales tax revenue for the last five years.
Councilmember Roberta Lee Johnson wanted to know if
other towns the size of Globe have similar incentive plans.
She also wants more city tax data. Councilmember Charlene
Giles wondered how to justify the cap with other retailers.
KQSS believes there are many ways to solve the problem
for the city and its retailers and none of them include raising
taxes. Instead of depriving the city, the tax cap actually
promotes economic growth. It's not a philosophical
discussion, rather an economic equation. And it's invariable.
In raising taxes, a point is always reached after which
revenue begins to decline significantly. It's a lose-lose plan
that could literally put the last nail in Globe's economic