Glendale City Council had few objections two weeks ago when the acting city manager and financial director announced they were abandoning plans to lower the sales tax rate and making preparations for raising property taxes.
Mayor Jerry Weiers reviewed some background at the March 24 budget workshop when he responded to a presentation by Tom Duensing, the city’s financial director.
“You’re not contemplating that we would change our sales tax, by lowering or increasing, but keeping it the same. And a lot of us took a pretty good beating the last couple years because of that sales tax increase,” Weiers said.
When the council agreed, at a June 2012 meeting, to raise the sales tax rate from 2.2 to 2.9 percent, City Hall published fact sheets that described that increase as temporary, because it was set to expire in 2017.
Residents might have believed that message when they voted in November 2012 to approve the short-term measure that was presented to them.
Four of the seven councilmembers voted at a June 24, 2014 meeting to remove the expiration date from the higher sales tax rate. Their discussion that night centered on the need to eliminate the city’s budget deficit.
Robert Heidt, president and CEO of the Glendale Chamber of Commerce, recalled the controversial vote in that meeting and how councilmembers discussed the need to revisit the raised rate, which the chamber opposed.
“When the city council discussed, and passed, the elimination of the sunset clause last year, it also discussed reviewing the increased sales tax rate annually for possible reductions. The chamber believes that the case for the increased sales tax should be reviewed annually, per the council’s discussion,” he said in an e-mailed statement.
As recently as last December, city officials still wanted residents to think that the sales tax rate would eventually decline.
Duensing published a five-year financial forecast that month that assumed the council would approve annual reductions, making the sales tax rate 2.85 percent in 2015-16, 2.825 percent in 2016-17, 2.8 percent in 2017-18 and 2.775 percent in 2019-20.
In Heidt’s view, that decrease could stimulate the local economy.
“The chamber also continues to believe that the increased sales tax burden, as one of the highest in the state, should be removed from Glendale’s retail customers as soon as possible to improve the competitiveness of the Glendale economy,” he said.
Weiers pointed out a silver lining, at last week’s meeting, when he asked Dick Bowers, the acting city manager, a question about Duensing’s proposal to raise property taxes, on the primary assessed values of homes by 2 percent, to generate revenue for the city.
“Is there anything that we’re not going to be able to do for $108,000, whereas if we didn’t get that increase and left the sales tax alone? At least we’re giving our citizens something, certainly in the right direction, anyway,” Weiers said.
Bowers anticipated that raising the property tax rate each year would eventually benefit the city.
“It continues to impact the budget financially and if we continue to take the 2 percent increase, it starts to mount up into a substantial component to our balanced budget and our increased reserve,” he said.
The mayor said he hoped those future financial gains for the city would mollify the voters.
He described those gains as “something that might appease them because of the sales tax increase and the promise that some of that would start going away and it didn’t. At least we’re giving them something,” he concluded.
Councilmember Lauren Tolmachoff then pointed out that, as of last year, the property tax rate in Glendale was 39 percent higher than in Peoria.
“So, in the long range, is that going to hurt us as we try to grow?” she asked.