In considering a budget for fiscal 2010, the Tucson City Council stood at Morton’s Fork — raise taxes and fees or cut programs and services and lay off staff to balance the city budget.
Last week, it chose the former. Was it the correct choice? Probably not.
Councilman Steve Leal said at Tuesday’s meeting that the community should be “proud” of the council’s decision.
What’s to be proud of? They raised regressive taxes on electricity and water, essential services that will hit the poorest the hardest. They made using the phone, which these days is an essential service, more expensive. Shouting 911 when you’re being robbed is unlikely to bring a cop. And they made public transportation more costly, which also is a brutal blow to the poor who are the biggest users of public transportation, some because they have no choice.
The council avoided a renter’s tax, but ironically, that would have been a more stable income source than taxes on utilities. Power, water, phone and bus users have the power to make the tax increases moot by using less power, water, phone and bus services.
The city got into this mess by recklessly adding staff, services and programs during the 2002-2007 economic boom that filled the city’s coffers with sales taxes.
Sales taxes rise and fall with the economic tide. Now that the tide has ebbed considerably, the city is stuck with perennial programs that rely on that fickle income.
The council should have adjusted the cost of next year’s city government to meet the expected amount of tax income next year without a tax increase.
The pain of layoffs would have been acute and limited to a few hundred people. Instead, they made the pain chronic and spread it among hundreds of thousands, disproportionately affecting those with the least ability to pay.
Chances of changing the council’s collective mind are slim. The council is expected to set its budget spending limit at Tuesday’s meeting and pass the budget June 9.
So the key now is for voters in the November election and beyond to insist on fiscal sanity when the sales-tax tide comes back in with an improved economy. If the economy returns to somewhere near 2006 levels, the city will again be flush with sales taxes, but it also will have the extra income from the increased utility and excise taxes it intends to impose July 1.
What will the city do with all that money? Give it back to taxpayers by repealing the tax increases? Sock it away for the next recession? Spend it?
The smart choice is a combination of the first two. The third? Well, what’s the opposite of smart.