December 31, 2009

The Tucson City Council will be asked Tuesday to impose a new 2 percent tax on rental properties. We oppose this tax.

There's no question that the city is mired in a dire crisis. It faces a $32 million budget deficit during the current fiscal year, which ends on June 30. The proposed rental tax would raise $3.5 million during this fiscal year.

But housing is fundamental to human survival. There is no choice but to seek shelter — and this tax would hit hardest those who can least afford it.

Instead, the City Council must make more, deeper cuts in city spending — including its own — and must ask voters as expeditiously as possible to approve new property taxes dedicated to supporting core services, including public safety, street maintenance, parks and transit.

The crisis is largely caused by the recession. Fifty-three percent of Tucson's budget revenues come from local sales taxes and state-shared revenues. The amount collected has dropped by $62 million over the past three years, according City Manager Mike Letcher. The city's general fund budget totals $420 million.

In addition to the rental tax, which would expire in five years, Letcher is asking the council to close the budget gap with a 3 percent across-the-board pay cut affecting all city employees, to agree to lay off 89 employees (but no commissioned fire or police officers), to increase employee contributions to medical premiums and to cut city contributions to outside agencies by $2 million.

He is offering the council a smorgasbord of other proposals, such as closing a little-used recreation center and a total of 17 city swimming pools, raising all fees for Parks and Recreation activities, reducing neighborhood association mailings and finding transit efficiencies worth $1 million.

Letcher also will ask the council to authorize ballot measures asking voters to approve "core service property taxes." We believe the council should do so as quickly as possible.

The city's existing property tax is capped at $1.75 per $100 of assessed valuation and requires voter approval to increase it. Revenue from the tax is very small: 2.7 percent of the city's budget.

Deputy City Manager Richard Miranda defended the proposed rental tax, telling us: "We need to make sure public security is taken care of, and we needed a specific funding source to do so. … We would like to see this happen pretty fast to stop the bleeding."

We agree that public safety must be a priority, but we believe there are superior alternatives to the unfair rental tax. Renters and homeowners both already pay property tax, although renters pay indirectly, through their landlords.

In addition to fast-tracking the core-services-tax vote, the City Council must:

• Raise fees that residents choose to pay, and the increases must be meaningful. For instance, Letcher's proposal would raise adult admission to city pools from $1 to $2, according to Kelly Gottschalk, the city's new chief financial officer. That's not much; those for whom swimming is purely recreational should be asked to pay more.

• Step up and cut its own costs. The city gives each council member $399,000 to cover staffing, ward offices and other expenses; it's time to dig deep and give back as much as possible, even if that means cutting staff support.

• Evaluate whether more layoffs of city workers may be necessary.

• Bite a politically bitter bullet and make deep cuts to the city's outside-agency contributions, which total $12 million. Unless these agencies are important to health, public safety, education or protecting vulnerable populations, the social contract must be voided.

This will be difficult, because each group has assertive advocates, and no cut will be politically popular.

Among the outside agencies: the Critical Path Institute, the Metropolitan Education Commission, the Pima County-Tucson Women's Commission, Tucson Regional Economic Opportunities, Tucson Botanical Gardens, Tucson Sister Cities Association, Tucson Museum of Art, Tucson Children's Museum, Tucson Pops Orchestra, Tucson-Pima Arts Council and the Southern Arizona Regional Science and Engineering Fair.

The city has budgeted $258,000 for events such as the Rodeo Parade and Tucson Meet Yourself that must either go into hibernation, downsize or find private support during the crisis. The city should get out of the neighborhood-mailings business altogether until the economy recovers; bulletin boards, Web pages and e-mails should suffice.

The city's television station, Access Tucson, is budgeted at $758,000 and should be cut to the bone, preserving primarily its valuable live programming of council meetings and study sessions.

The crisis is real. The answer is not a rental tax. Instead, the council must move ahead with all deliberate haste on getting a core-services tax to voters, making significant increases in fees that residents choose to pay and taking a politically courageous stance on cutting spending until the crisis is past.