Last week, the Cottonwood City Council voted to move forward with a sales tax increase, pending a vote at a public hearing on Tuesday, July 17. If the tax increase passes, all sales at businesses in the city of Cottonwood will be taxed at a rate 0.5 percent higher.
But for some businesses in Cottonwood, this increase is no reason to worry.
“I don’t think it’s going to affect us,” said Chris Espere, a manager at Safeway on Main Street.
According to Espere, as a grocery store selling essential items, a sales tax hike won’t have a major impact, especially if many customers remain loyal to the store they have been shopping at for years.
“If people need things, they’ll pay what they have to pay,” he said.
Tim Watts, the store director of the Food Lion grocery store, shared a similar sentiment.
“Any time there’s a tax increase, people aren’t goingto be happy,” Watts said. “But in this business, it’s essential that people eat. They still have to shop for food. I don’t think they’ll change what they buy because it’s all still taxed.”
Watts said that the real effect of a sales tax increase will be felt by customers, not businesses.
He said if consumers see the benefits that are intended to come from the sales tax increase, such as road improvements, they may not be upset.
The importance of using the sales tax on worthwhile projects was shared by several Old Town businesses.
“Obviously my initial feeling is like, ‘No. No new taxes,’” said Chanelle Cook, the owner of the Old Town General Store.
But if it was used for something to benefit the town, she said she could support it.
Cook mentioned the value of promoting Old Town and local businesses to be a worthy cause.
“It depends what they’re going to do with that sales tax,” said Ellen Van Wert, an owner of Jim & Ellen’s Rock Shop in Old Town. “If they’re going to build a new sewage plant with a fancy building like they did, then no. They spend money on themselves.”
However, Van Wert said if the money is spent on infrastructure and road maintenance, as council has indicated they plan to do, it would be worth raising taxes, especially when sales tax revenue could be raised from tourists that visit Cottonwood.
“If all these people from out of state are coming in and spending money and driving prices up with money to spend, let’s take advantage of it with real estate and sales taxes,” Van Wert said. “We can expand Old Town and improve the town’s services.”
Some retailers felt that while a tax increase could help the town, a sales tax was the wrong way to raise money, especially because of how it could impact working-class customers.
“I’m opposed to this — whatever it is and whatever it’s going be used for,” said Ranney Moss, the owner of Adventures Unlimited Books in Old Town. “The thing that infuriates me is that sales taxes are the most regressive tax there is. It hurts the poor people the worst. Rich people don’t care if they pay another penny or 5 cents for something.”
Moss noted the high poverty rate in Cottonwood, with 21.5 percent of the community living below the poverty line, according to Data USA. Moss argued that a property tax would be a better way to raise taxes. Unlike Clarkdale and Jerome, the cities of Cottonwood, Camp Verde and Sedona have no property taxes.
At meetings last week, the Cottonwood City Council rejected the idea of raising new revenue through a property tax, since creating one would require a public ballot referendum, delaying the revenue increases for at least a year and a half — too long for it to ameliorate the hole in the city’s budget. With a sales tax, the council can act themselves, as they are set to do on July 17.
Jon Hecht can be reached at 634-8551 or email jhecht@larsonnewspapers.com
