Soon, those making purchases in Sedona will see a slightly higher amount on their bill. But if all goes as planned, it will be for a worthy cause.
On Tuesday, Jan. 9, the Sedona City Council voted 6-1 to approve a new half-cent sales tax. This money will be used to cover an estimated $35 million in traffic mitigation construction over the next decade. However, if the projects are completed before then, council has the right to eliminate the tax.
Councilman John Currivan was the dissenting vote, saying that while these projects are needed, he’d rather cut areas in the budget and use those funds to pay for the improvements.
With its passing, the new tax will be effective Thursday, March 1. When doing so, total sales tax in the Yavapai County side of Sedona will increase from 9.35 percent to 9.85 percent. On the Coconino County position of Sedona, it will bump from 9.9 percent to 10.4 percent.
“We’re actually going to get something done and take care of this problem,” Councilman Joe Vernier said. “Is it going to be perfect? I doubt it, because there’s going to be other factors out there. But we can’t just stand by and do nothing and get nothing in return.”
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, Currivan said he’d consider no more than a quarter-cent increase and Councilman Tom Lamkin wanted to see more in the range of a three-quarter cent bump.
In October, council took formal action to direct staff to prepare an ordinance to amend the City Tax Code to provide for an increase to the transaction privilege tax in the amount of one-half percent for a period of 10 years, dedicated to transportation related projects, services and administration and to prepare all necessary notices and reports.
For 10 months, a Fiscal Sustainability Work Group had been meeting once or twice a month to discuss just that — fiscal sustainability. The committee 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 nontransportation-related projects with the current funding sources. They also recommended council adopt recommended changes to the current fund balance policy and debt policy.
During those meetings late last year, City Manager Justin 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.