Monday, February 23, 2009

Bleeding and Stuffing

Tucson, Arizona. The Citizen has a Carli Brosseau article informing us of new taxes the city is considering to balance its budget in the current economic climate. What leaps out of the print is the regressive nature of the taxation. The largest cash cow is a tax on residential rent. Does that hit landlord or tenant? Uh-huh. Let’s extract funds from those who can’t afford to own a home. While we’re at it, let’s increase bus fares for those who can’t afford a car, and why stop there? Let’s hike taxes on water, natural gas, electricity, and garbage. These guys know regressive with a capital R. Since the poor are already bleeding, what’s a little more?

I don’t have data but highly doubt the elasticity exists to respond to a trivial increase in the bed tax for our resorts, probably easy money from those who won’t even notice. However, the next idea is to hit the gem show vendors. What?! Within days of an article quoting the show’s serious consideration of leaving Tucson for other locations due to a variety of issues, we have an article informing us that the city is considering higher taxes on show participants.

Does the council grasp the rage they fuel when they layoff and furlough workers while continuing to squander millions on do nothing outfits that provide positively nothing for Tucson? Why continue to stuff the Cloth? Scrap the do nothing acronyms and save millions.

10 Comments:

Anonymous Robish said...

The City of Tucson has a systemic problem, a community with a very small tax base and lots of need for policing, better education, and other costly services.

A couple years ago, Mayor Bob talked about the size of Tucson's economy compared to cities of similar population. I think Milwaukee's was something like $61 billion, and Tucson's was barely half that. It was probably the most analytical thing the mayor has ever said, actually.

Instead of nickel-and-diming every industry and business sector to death, the city council and administration should focus on wealth creation. They need to grow the tax base by encouraging small businesses to start up and expand, not burden them with solving society's problems.

With a bigger economy you can raise more taxes with the same tax rates, and you can pay for the services that a civilized community deserves and expects.

Too often, the city council has it backwards. They tax, regulate, obstruct, and overburden the private sector, what little private sector Tucson has. Largely because of that, we have little wealth actually generated here. There is a small tax base, so the city then invents new taxes.

Their timing would be comically bad if it weren't so pathetic. Talking about raising fees on gem show vendors right after a down year for the gem shows, and a week after comments by the head of the largest show that he's now considering moving the show out of town. Incredible.

But I guess that's Carli Brosseau's fault for bringing that to light, right? (Is she the only writer/editor at the Citizen still functioning as a self-respecting journalist?)

The Cloth needs to do a better job of "controlling the message".

2/23/2009 11:25 PM  
Blogger james said...

"They need to grow the tax base by encouraging small businesses to start up and expand, not burden them with solving society's problems." I disagree that its any government's responsibility to grow a tax base. Government's can get out of the way by eliminating burdensome regulations and taxes but when they get in the area of business creation you get do nothing groups like TREO, MTCVB, C-Path, etc. This town got screwed by the councils of the 70's and
80's who decided against annexing the northeast and foothills. Too late now but now we do have 10's of thousands of non-City residents who place significant demand on City services-Parks, streets, jail, police, etc-and pay a tax only when they venture into town to buy something. This isn't going to be solved by taxing their way out. Its a systemic problem that's only going to get worse as more and more businesses locate on the fringes of the City or in OV or Marana.

2/24/2009 8:53 AM  
Anonymous Anonymous said...

Either Marana or Oro Valley (or both) zeroed all funding for TREO, seeing the scam for what it is. The city should do the same and also cut MTCVB by 50% or more. That would free up millions.

James is absolutely right about the annexing.

2/24/2009 11:05 AM  
Anonymous Max Cady said...

You do realize that this is a list of potential options, not a list of recommendations, right? No one is suggesting that all of these be implemented. They're put forward so that the council can review all options that are out there. Hein's recommendation calls for only $5 million in fee increases.

2/24/2009 11:44 AM  
Anonymous Anonymous said...

Max is correct, and yes.
From first sentence "..is considering.."

2/24/2009 12:40 PM  
Blogger Liza said...

I worked as a service provider for a municipal government for over 20 years.

I haven't much time right now, but here's a quick lesson.

Much of the problem with governments lies in how they do their budgets. There is little or no incentive for a government department/division/unit to use their funding efficiently. Reasons:

1. Budgets are done on an annual basis and the mistakes of the past year are forgiven in the next budget. You are always working with the current year's budget (except for long term projects that might be handled differently.)

2. "Use it or lose it" prevails in government budget processes. The departments try to get next year's budget to retain as much of this year's funding as possible. to do that, you must "use it or lose it." Again, no incentive to use financial resources effectively.

3. Politicians and bureaucrats try not to do budget cuts, but when they do, they tend to do two things:
a.) Cut parks, libraries, and very visible services first so that the public knows times are tough.
b.) After that, they might lop off an even percentage across the board with the possible exceptions of Police and Fire. This means that they NEVER take a cold, hard, and COMPREHENSIVE look at what they are doing and where money could be saved.

The bottom line is that there is always fat that can be trimmed, but governments almost always lack the kind of organization, processes, and oversight needed to cut in ways that would enable them to deliver services at a lower cost.

Instead, they cry "deficit, deficit, deficit" for awhile to manage expectations, they cut parks and libraries and threaten that the Police are next, then they go away and dream up new taxes and fees.

They are just trying to get through the year. Next year is another budget, another year.

2/24/2009 2:38 PM  
Anonymous Robish said...

James,
I think we actually agree about a government's role, especially a local government's role in the economy, and perhaps I stated my position in a way that sounded more activist than I intended.

My point was really that the city council needs to think about growing the pie, and not so much about dividing the pie. The pie is shrinking, and it is doing so partly because of national factors that are outside the council's control and partly because the services that the city delivers are not sufficient to protect, educate, and motivate the population.

You're right, when the city government gets too full of itself, it starts over-funding under-performing groups like TREO and the others, and they all congratulate each other for a job well done.

Downtown and Rio Nuevo were always good example of their misplaced priorities. The city spent lots of money and wasted a lot of time on planning for museums that weren't even going to be in downtown (because museums are "good for people"), while ignoring the obvious social problems that scare people away from the downtown that is real and exists today.

Good and worthy projects are strangled because the council expects the developer to solve a bunch of social problems in addition to building housing, creating vitality, making a profit, etc.

Tucson suffers the ill effects of a tyranny of the minority in many cases. A few neighborhood activists get to impede all sorts of progress, partly because the number of actual people they speak for is misrepresented.

Liza, your analysis is solid.

2/24/2009 7:03 PM  
Anonymous Anonymous said...

Liza, you are right on target. The whole notion of oversight and transparency vanished as soon as Walkup arrived. Read some of the old published reports of the City Budget Advisory Committee that was sunseted as a result of their growing fund of knowledge about the Budget process. Those reports are filled with gems,which is the very reason the City Finance department insured they were never placed in the Public Libraries. It would have been akin to Martin Luther writing the Holy Bible in the vernacular! Therefore, the "Reformation" that never happened then, must now proceed.

3/01/2009 3:18 AM  
Anonymous Anonymous said...

James, it was Lew Murphy who stated in 1972, "we either annex or die." He was a prophet. And we marched on in time allowing these autonomous pockets of municipal incorporated villages of narcissism to form with no means of providing their own Police,Fire, and Parks provisions. But man are they proud to say, "but we live in Oro Valley." I say, turn off the spicket.

3/01/2009 3:24 AM  
Anonymous Scarlett Letter said...

Interesting story on downtown Phoenix branding effort:

http://www.azcentral.com/arizonarepublic/news/articles/2009/03/02/20090302brand0302.html

3/02/2009 11:03 AM  

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