A rent tax like Osiris

Shall the idea of a double-tax on renters now be resurrected every year in Tucson? This time, the City Council didn't wait for public outcry to defeat the idea, but why is Mike Letcher even putting forth the idea? This is why Kromko, Juliani, and co. shouldn't have scrapped plans for an initiative last year.

Given the strong possibility of a recall election, there is much more to say about this, when the "real job" lets up a bit. Don't take talk of de-funding the governmental functions of government and emergency services seriously; demand that the city council meaningfully cut the scope of government.

It's only a 1% difference, but: Vote "No" on Tucson Proposition 400

To avoid imposing on Tucson a drastic all-at-once budget cut, I was going to recommend a "Yes" vote on Proposition 400, the extension of "home rule" budgeting for Tucson, until I read the city's own numbers. The expected difference that would be made by failure of Proposition 400 is 1% or less of the city budget!

Turn to page 3 of the City's information packet on the ballot question. In each year 2011-2014 the difference between the projected city expenditure and the state-imposed limit is 1%. For example, in 2011, the state-imposed limit is projected to be $1,337,883,920, and expected revenues are $1,345,876,320. The difference between the two is 0.5%; repeating the calculation for the 2014 figures, the difference is 0.8%.

Endorsers of the proposition, such as the Arizona Daily Star, are being a bit disingenuous or naïve about the tax implications of passage. Yes, passage of the proposition would not directly raise taxes, and failure of the proposition directly lower them. But with the city required to bank excess revenues, there would be no rationale for taxes to be any higher than necessary to meet the state-imposed limit; we can expect lower taxes in the long run were Proposition 400 to fail.

Article 9 Section 20 of the Arizona Constitution sets forth a recipe for fiscal restraint, adjusting 1979-1980 expenditure for population growth and inflation of the currency. Subsection 9 permits cities to avoid this restriction by holding special elections, hence Proposition 400.

Remember that earlier this year the City Council was contemplating imposing a double tax on renters to balance its budget. Nicety after nicety was added during the housing boom, and when revenues decreased the Council couldn't find the integrity or the moxie to cut back the scope of government spending to pre-boom levels. Article 9 Section 20 limits, which tie spending growth to population growth, would prevent such irresponsibility in the future; by re-imposing these limits on Tucson, defeat of Proposition 400 would put the city back on the fiscal straight-and-narrow path in the long run.

The Tucson Rent Tax Initiative

In response to the Tucson City Council including a double tax on renters in their budget, three of the area's most prominent "good government" activists, Jerry Juliani, Richard Bayse, and John Kromko, are circulating petitions to amend the city charter by initiative. The text is as follows:

Official Title: Enough Tax

Amending Chapter 13 of the Tucson City Charter by adding a new section called "Prohibited Taxes" providing for the prohibition of certain taxes.

Text of proposed Amendment

Be it enacted by the people of the City of Tucson:

Chapter 13 of the Tucson City Charter is amended by adding a new section, to read:

PROHIBITED TAXES

The City of Tucson shall not impose any tax on the rental or lease of residential property, nor on the proceeds of such rental or lease.

For the purposes of this section, residential property includes unaffixed manufactured homes and residential ground leases. It does not include any rentals or leases for less than thirty days.

Any such tax in effect on the effective date of this act is hereby repealed.

I've given John Kromko a bit of grief on this 'blog, but this time around, he seems much more "on the ball", moreover, the initiative is much better written.

That renters will oppose the rent tax is almost a sure thing. It's mere anecdotal evidence, but even the pro-tax, unlimited government types around the office are against the rent tax. I think if we play up that this is unfair, unnecessary, and regressive, we can count on enough of the homeowner vote to win. (It actually helps here that Kromko is an old-school left-liberal.) It'll help, too, if students actually show up to the polls when there isn't a charismatic sloganist ("transformational candidate") to inspire them to take up voting as a means of self-expression.

Those seeking more information or petitions should visit EnoughTax.org. More on Tuesday's city council meeting to follow.

Tucson Ciy Council proposes double taxation of renters; 700 turn out to protest

Like the State of Arizona, the City of Tucson created new spending programs and padded old ones during the construction boom. Now that the boom has went bust, they're predictably trying to raise taxes to balance the budget, when they should instead be cutting programs. (Talk to an opponent of spending cuts sometime. It's amusing. If we can't eliminate programs without sliding into some sort of Third World conditions, why don't I remember it being so bad before they existed?)

Among the tax increase schemes under consideration is a 2% rent tax, as reported in the Tucson Citizen and Arizona Daily Star. Over 700 people turned out last night to protest this proposal, with well over 100 requesting to speak.

The issue was mostly framed as being whether or not renters are able to pay the increase. That's a silly way to discuss taxation, it would have nearly any small tax increase being OK. Harms come at the margin. The questions that should be asked are: should the additional money be the City's? Why? And is the tax fair?

Councilwoman Karin Uhlich, according to Daily Star commentator Josh Brodesky, has renters paying less than their fair share. As this is ridiculous, Uhlich should be voted out of office. Renters do not directly pay property taxes; their rent instead reflects the level of property tax that must be paid by their landlords. They pay rent, the landlord pays the property tax, thus they're already paying for city services just as homeowners and business property owners do. A rent tax would amount to double taxation of a particular class of people, a balancing of the budget at renters' expense to the benefit of homeowners and business property owners.

The rental tax is the brainchild of Uhlich (D-Ward 3), Regina Romero (D-Ward 1) and Rodney Glassman (D-Fraternity Row). When it comes time for a vote, I'll let readers know who was in favor and who was against. Those who voted in favor ought to be evicted from their offices when the time comes--both double taxation and taxation of peculiar classes ought be simply unacceptable. Tucsonans often give their officials a free pass. The presence of over 700 angry members of the Geritol Set at last night's meeting means that this may not be the case. Opponents of rent taxes are getting organized, having launched a (lowbrow) website. Word is that John Kromko, Mr. Ballot Initiative, is considering launching a referendum effort to repeal the rent tax if the Council approves it. Kromko's ability to get things done has waned in recent years, but here's hoping he has one more success in him.

A further hearing will be held on Tuesday, 5 May at 5:30 PM. I'll be able to attend this one, and will keep readers up to date on further developments.