Jan. 24 City Council meeting: Pending state legislation would cut City revenues by $1 million

Jan. 24 City Council meeting: Pending state legislation would cut City revenues by $1 million

Members of the Globe City Council: Mayor Al Gameros, Vice Mayor Mike Stapleton (District 4), and Council members Freddy Rios (District 1), Mike Pastor (District 2), Jesse Leetham (District 3), Mariano Gonzalez (District 5), and Fernando Shipley (District 6). All members were in attendance at this meeting except Councilman Rios.

State legislation would wipe out sales tax on food for home consumption, cost the City $1 million annually.

City Manager Paul Jepson updated Council on pending state legislation that could affect Globe, focusing on a bill currently in the house that would end the sales tax on food for home consumption.

HB2061 would prevent all local governments from charging a TPT sales tax on food for home consumption. If passed, the legislation would result in a statewide reduction of tax receipts of $161 million. Globe would lose revenues of about $931,000.

Another bill, HB2067, would end the taxation of residential leases and rentals. Globe does not tax residential rentals. For the 75 Arizona cities that do, Jepson said they would lose a total of $179 million.

With regard to both HB2061 and HB2067, Jepson said, 

“This is the the state legislature putting together an initiative to remove municipalities’ ability to customize their tax structure to benefit their residents. By removing this tool from our toolbox, it doesn’t remove the cost of the million dollars that in the future we were projecting we could collect. We have to make that coverage from somewhere else, and so we have to axe things somewhere else.”

Jepson pointed out that Council worked hard to create a system that would share the burden of the City’s expenses with out-of-town people who travel through and visit Globe. One pillar of that system is the current 2.3% tax on food for home consumption, which provides about $1 million per year for the City. Jepson said if Globe had to obtain that million dollars through property tax, the City would have to triple property tax.

Jepson also pointed out that many non-residents purchase food for home consumption in Globe, which helps to balance the tax burden with travelers and visitors.

Jepson said this is a local control issue and a fairness issue, and the state legislators are making a change that will impact Globe but not themselves.

Mayor Gameros said he hopes the bill won’t make it to the Governor’s desk, and even if it does, that she will veto is it.

“This is an overreach of government to take away local control… We depend on this revenue.” Mayor Al Gameros

The bill is currently in the house and has just come out of committee. However, Jepson said a companion bill might come from the Senate.

Mayor Gameros said, “Directly, you’re going to save $2.50 on a hundred-dollar bill for food, but indirectly what is it doing to our budget and the costs to our residents?”

Councilman Gonzalez agreed that the bill would be unfair and an issue of local control. He pointed out that people from Phoenix often don’t think of the concerns of a small town, such as having 120-year-old infrastructure that can’t be easily repaired.

“My complaint is this: If you’re going to do this to us, let us have an early input into the process…. You all should have been telling us last year as we built our budgets.” Councilman Gonzalez

Councilman Pastor said he feels this legislation is about representatives wanting to be able to tell people in the next election that they had lowered their food taxes to make themselves look good. He recommended people read a recent article in the Republic by Laurie Roberts that explains the issues. Pastor said people should put pressure on David Cook, Globe’s representative.

Jepson said Cook is advocating for a permanent “hold harmless” solution whereby Globe would receive funds that would make up for the lost revenue.

Councilman Shipley said this is not the first time state legislature has tried to tell cities and towns how to run their cities and towns. He pointed out that cities and towns are all different and what works in one place doesn’t work in another.

“It’s going to force us to raise taxes on the very few people that actually pay property taxes in this town. They’re going to have to subsidize everybody else who comes into town, and that’s not what we want to do. It should be spread out amongst everybody that comes into town to buy goods and services.” Councilman Shipley

Jepson pointed out that Phoenix doesn’t have the same situation with visitors and travelers that Globe does, in that in Globe, visitors and travelers outnumber residents by three to one. Sales tax is the only way travelers and visitors provide revenue for the services they consume, including police, fire, roads, and medical.

Jepson encouraged people to speak up and share their thoughts about the impacts of this legislation.

Another bill, HB2003, would create corporate income tax rate cuts. This legislation would have a $40 million total impact in its first year (2026) and an overall $120 million reduction in the “shared” amounts that the state collects and then distributes to cities.

Additionally, proposals for specialized exemptions would apply to children’s diapers and feminine products, which would have total statewide impacts of $28 million. The impact for Globe would be about $100,000.

Jepson said these bills would all reduce the city’s ability to provide services to residents.

Jepson said, “The more and more they exempt things from taxation, the more and more everybody has to rely on the taxes for those things that are left. Therefore the taxes go up, and they take more, and then they say those taxes are too high, and they cut that,” creating a vicious cycle.

On the positive side, SB1103 would streamline the process for approving certain zoning requirements for multifamily homes and other construction projects. It would be the City’s option whether to participate. Jepson said there is also talk at the state level about parking requirements that affect zoning; some legislators feel that the parking requirements in some communities are too strict and push development out of the cities.

The Dunn bill would provide $1.75 million for sidewalks on Jess Hayes. This is a package of about 80 projects that Rural Transportation Advocacy is putting together, Jepson said.

City stands to receive millions in federal grants

Community and Economic Development Director Linda Oddonetto presented the federal portion of the legislative update. She described funding opportunities that are coming up and how the City is preparing to take advantage of these opportunities.

These opportunities fall into the categories of infrastructure, economic resilience, and environmental justice. Oddonetto said in some cases, changes in requirements are opening up opportunities for Globe that didn’t exist before.

Globe is seeking or in some cases already benefiting from the following major awards that Oddonetto says are coming down the pipe within the next five years:

• In the area of public safety, the City is working toward purchasing a new aerial ladder truck through American Recovery and Reinvestment Act funding.
• Globe was recently awarded $55,000 to abate the medical center fire station in terms of the threat of fire.
• USDA Rural Area Development Initiative funding would help build Globe’s future fire station.
• Under the heading of quality of life, the City is requesting $1 million for restoration at Besh Ba Gowah under the Safety Infrastructure/Inflation Reduction Act for Environmental Justice.
• Globe has made the final list for the National Historic Preservation Group as among the 11 most major sites in the United States, which could lead to the City receiving significant funding.
• Under infrastructure, Globe is seeking DOT grants between $2 million and $6 million that would fund a safe streets and roads program, including sidewalks, crosswalks, storm drains, lighting, and safety cameras.
• In the area of economic development, Globe has secured $750,000 in USDA rural development money and is also seeking additional funds, for the Michaelson Building Incubator and Workforce Development Project. This project would partner with Gila County and serve the region.
• The City is also seeking additional DOT funding for an economic development/quality of life initiative that could include a parking hub structure, Phase II of Globe’s housing study, and Globe’s workforce development collaboration with Gila County. The funds would also support the incubator project.
• The City expects to receive $5.5 million for the Connie’s Bridge project through a DOT grant program.

Jepson pointed out that the City’s dedicated grant writer has been crucial in obtaining these funds. 

The process for bringing federal money to Globe includes a federal lobbyist who tees up the opportunities. Jepson said that the City applies, and then a lobbyist works with Council to bring them home.

Oddonetto said the projects listed above are just a snapshot and are not the only ones her department is working on.

Forest Service to develop a regional recreation plan

Adam Bromley, Tonto Forest Ranger, presented to Council the Forest Service’s Copper Hills Regional Recreation Plan. Bromley said the Forest Service is looking at a recreation plan for the Globe area to help boost the economy by creating opportunities to draw people up from the Valley.

The Forest Service is currently developing a list of folks who would need to or like to be involved in creating the plan, including representatives from Globe and Miami, as well as individuals and user groups. Southwest Decision Resources will be facilitating the discussions – the same firm that facilitated the process for the recreational plan around Superior. Bromley said this will be a long-term planning effort.

“This is a good time. The stars are aligning. These planning initiatives are very important for us to move forward and bring these much wanted and needed projects to fruition.” ECD Director Linda Oddonetto

Bromley also said the entirety of the Globe Ranger District and other regional areas are being included in a program that will provide funding for restoration and fire-related work. According to the Tonto NF’s Facebook page, “The strategy focuses on efforts to protect at-risk communities, critical infrastructure, and forest resources from the risk of catastrophic wildfire.”

Bromley said the work associated with the program will “really reduce our wildfire risk here over the next several years.”

Assistance with Mexican documents available at Feb. 25 mobile event

Mayor Gameros noted he had met with a representative of the Consulate General of Mexico about a partnership on a mobile event where people will be able to obtain resources and information about getting visas, birth certificates, and permits to cross into Mexico. The event will take place on February 25. Details can be obtained by contacting the Mayor’s office.

Motions approved

Council also approved motions for the following:

• Accounts payable in the amount of $695,537.05
• Appointment of Janette Herrera to the Library Committee
• Installation of a wall sign and artist mural for El Ranchito, located at 686 N. Broad Street. Details can be found at https://bit.ly/3HwRggQ.

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To view documents related to this meeting, click here. 

Full minutes can be found by going to the City Hall website at https://www.globeaz.gov/government and clicking on Agendas/Minutes in the bottom left-hand corner.

The Globe City Council meets every second and fourth Tuesday of the month at 6:00 p.m. at City Hall. The meetings are currently open to the public at 50% capacity. Members of the public are requested to wear a mask except when seated. Seating is limited to allow for social distancing.

Members of the public can also participate in City of Globe public meetings by viewing the meeting live on YouTube. To view the Council meeting live stream, go to the City of Globe’s YouTube channel (search for City of Globe Arizona). 

To speak to agenda items before or during the meeting, you can call or text (928) 200-0154 or email council@globeaz.gov. If you desire to speak to the Council during an agenda item.