Page Arizona set to vote on 1st property tax

PAGE, AZ -- Voters in Page will be asked May 21 to decide if they want a municipal property tax imposed on themselves for the first time in Page's 38-year history as a municipality. Page City Council voted 7-0 Wednesday night to authorize the referendum, to coincide with the general election for mayor and three council seats. The ad valorem tax would have one condition. The city would abolish the tax -- and its $600,000 in annual revenue -- once Page's $14 million in bond debt is retired. A separate, newly approved ordinance allows council to apply all proceeds from land sales to the debt. Page was issued bonds in 1994, 1997 and 1999 for an ambitious series of construction projects, for a total obligation of $24 million. The debt was refinanced in 2011. Mayor Bill Diak and others indicated previous councils had passed on chances to retire the debt, and he vowed to "not kick it down the road for another 13 years." "This council will have this resolved ... We're going to have a plan, which we should have had 13 years ago," said Diak, who was elected to council in 2009 and voted mayor in 2011. Diak and others insisted their vote did not reflect an opinion for or against the tax. City Manager Rick Olson, author of the proposal, said council's only intention was to decide whether to send the measure on to the electorate. Speaking against the idea were Page residents Mike Makowski and Arleen Miller. Makowski reminded council that two bond issues of the Page school district failed, in November 2011 and again last November. He predicted a city property tax would meet a similar fate. "I don't like taxes, either," said Councilmember Scott Sadler, "but we need a revenue stream one way or another." Olson told council that he would be hard-pressed to find $1.2 million a year for debt payments from a $19 million budget that has become heavily dependent on $6.5 million in sales tax revenue, while state and federal revenues are shrinking. Revenue from the sale of city-owned land has also plummeted in a weak economy. "I feel your bond debt is crippling your city's ability to thrive," said Olson, named city manager last year after serving as city attorney for nearly 10 years. Vice Mayor John Kocjan and Councilmember Lyle Dimbatt argued against considering a sales tax hike as a remedy. Kocjan cited the combined tax of 15 percent, and Dimbatt likened another increase to "turning your back and waiting to get stabbed." Kocjan said the property tax would be "nothing next to what the school tax was going to be." Kocjan said he reviewed some projected tax payments drawn up by Olson, but they were not released during the meeting. Last fall, Olson listed a few residential rate examples, ranging from $80 to $400 a year.