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The public is invited to come and discuss a proposed sales tax increase that would help cover traffic mitigation projects over the next decade.
The Sedona City Council will hold a public hearing followed by possible action regarding an ordinance amending the city’s tax code to temporarily increase the Transaction Privilege Tax by one-half percent. The meeting will take place on Tuesday, Jan. 9, at 4:30 p.m. in council chambers.

New Tax Rate

n The rate in the Yavapai
County side of Sedona
will increase from 9.35
percent to 9.85 percent.
n The Coconino County
side of Sedona will
increase from 9.9 percent
to 10.4 percent.

In late September, the majority of the council was in favor of directing staff to pursue a half-percent sales tax increase. Vice Mayor John Martinez was seeking a 1 percent increase, Councilman John Currivan said he’d consider no more than a quarter-cent increase and Councilman Tom Lamkin wanted to consider more in the range of a three-quarter cent bump.

If approved, the tax is expected to be implemented by March 1. An increase to the sales tax rate only requires adoption by council via an ordinance.

For 10 months, a Fiscal Sustainability Work Group had been meeting once or twice a month to discuss just that — fiscal sustainability. The committee, made up of Ronald Bud-nick, Kurt Gehlbach, Doris Granatowski, Lou Harper, Charlotte Hosseini, Sedona Fire District Chief Kris Kazian, Holli Ploog and Economic Development Director Molly Spangler, covered several topics including fund balance, bonds and funding sources. The group unanimously voted to recommend the following to council:

  • Increase the city sales tax rate by 1 percent to be dedicated to the funding of transportation-related projects and the cost of additional personnel and project management to accelerate the completion of those projects.

  • Set a sunset on the tax increase of 10 years or less if deemed appropriate.

  • Continue to fund other non-transportation-related projects with the current funding sources. They also recommended council adopt recommended changes to the current fund balance policy and debt policy.

Clifton presented the council a breakdown of the dozen or so traffic mitigation projects that have been discussed. He listed each, along with what percentage of each that could be undertaken [50 to 100 percent] yet still be effective. In the end, Clifton presented an estimated budget over the next 10 years of nearly $35 million. This cost would be covered by both a tax increase and use of capital reserves. The estimated cost to fully fund all the projects is around $62 million.

“The really big caveat to this is that we understand that this particular arrangement of projects and revenue assumptions is likely to change quite a lot,” Clifton said after that September meeting. “In other words, it’s really not a commitment to complete the projects as they’re outlined on the spreadsheet. Rather, it reflects that there are various scenarios that could play out but that in any event we should be able to complete a lot of great projects with a half-cent sales tax.”

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