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0.8 cent sales tax hike looms over city
Written by Staff Reporter   
Wednesday, 16 July 2008 13:44

The sales tax increase is coming.

Without the hike, police will be unable to respond to shoplifters, speeders, domestic abusers and drunks.

Houses will burn to the ground because firefighters will be stuck at the station, according to some officials.

The current tax of 2.2 cents for every dollar spent will be raised to 3 cents for every dollar spent.

This will bring an estimated $1.8 million for fiscal year 2008-09 to the city.
Cottonwood City Finance Director Rudy Rodriguez said the economy is expected to start turning around in late 2009. This economic recovery is projected to produce $3 million in revenue with the tax hike during FY2009-10.

Rodriguez said he based this expectation on many sources such as the Governor’s Office of Strategic Planning and Budgeting.

Local realtors also say the turnaround is going to start late next year, he said.

Century 21 Real Estate Broker Jerry Butterbondt said based on what he has read, and from watching the current market, the economic recovery should start in about a year and a half.

His reasoning was based on the assumption of foreclosures on homes leveling out, and buyers showing up to buy property on the cheap.
“There are people out there now looking to purchase short sales and foreclosures,” Butterbondt said.

He also said people having trouble finding a job comes down to attitude. “If they can’t find a job, it’s because they aren’t looking,” Butterbondt said.

The local real estate market is strong and there are buyers out there looking for a good deal, according to Butterbondt.

Cottonwood Real Estate Broker Phil Terbell said he has been wondering what set of circumstances would cause the market to turn around.

He referred to high gas prices and the current financial crisis with the country’s largest mortgage companies, the Federal National Mortgage Association, nicknamed Fannie Mae, and the Federal Home Mortgage Corporation, nicknamed Freddie Mac, and how these problems would continue to make for a “soft” real estate market.

Terbell said his national contacts all project the real estate market to begin recovering in late 2009.

The city is cautiously optimistic for the recovery, Rodriguez said, and he will look at the incoming revenues for FY2008-09.

“If the revenue is not as high as expected,” he said, “then the city will have to keep going along. Again we’re back to assumptions, and I prefer to be optimistic that things are bad, but they are going to get better.”

Rodriguez said the city has been dealing with lack of revenue from having no property tax by not taking care of city employees.

He referred to new buildings like the Public Safety Building and the coming recreational center, but the problem is that the city cannot pay the employees what they are worth.

The city has been paying for public services by not paying competitive salaries, he said.

If worse comes to worse, then the city will have to institute
a reduction in force, Rodriguez said.

He said the city council decided to increase taxes to prevent a reduction and ensure the current level of services to the public are maintained.

“The sales tax is funding everything, so when it is booming it is great; when it is not, then the city is in for a wild ride,” Rodriguez said. The city is currently on a “wild ride.”

His understanding is the sales tax hike will be removed if a property tax is approved by the voters and the money will then be directed to police, fire and streets.

“This is by no means over,” Rodriguez said.

Greg Nix can be reached at 282-7795, Ext. 122, or e-mail This e-mail address is being protected from spambots. You need JavaScript enabled to view it


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