Prop 406 – Linda Abbott & Co.’s Sales Tax Increase

After the 6/30/2009 taxes were rescinded on 8/11/2009 by a unanimous vote of the Council (see “The Taxes are Rescinded! For Now”), Council Member Abbott resumes beating the drum for a committee made up of citizens to help Abbott & Co. (including incumbent candidates for re-election Dave Crozier and Les Presmyk, plus John Sentz and Steve Urie) figure out how to cut spending and generate revenue for the Town.

With Abbott & Co. dominating the choice of citizens for the committee, the majority of the 54 members reflect the views of the Council members who voted for tax increases.

This “committee of citizens” technique had worked beautifully back in 1999, as a way to get citizens to recommend taxing themselves. A similar group was convened, and they recommended a .3% tax increase which went into effect 7/1/2000.
Had the Council directed the Citizens Budget Committee (CBC) of 2009 to balance the budget without tax increases, those citizens would have been far more serious and creative. But Steve Urie advised the CBC members that “everything was on the table,” including tax increases. (As a participant on the CBC, I was present when he made this statement.)

Things got a little dicey for the majority Council because of two Gilbert citizens: Jeff Niland and Jared Taylor. They were on the 13-member Steering Committee, which vetted the recommendations of the 7 subcommittees.

Even though they were in the minority, Jeff Niland and Jared Taylor were very influential due to their combined business background and expertise in loss elimination and efficiency techniques, including Six Sigma, LEAN, TPM, 5S, Kaizen, flowcharting, and other methodologies. Their long record of accomplishments included routinely improving quality and saving millions of dollars for both mid-sized and large corporations. Both gentlemen have written articles for Gilbert Watch.

The CBC members met from 9/17/2009 through 12/9/2009, and recommended far more ways to cut spending, streamline operations, and generate revenue than the majority members of the Council accepted.

The sales tax was specifically “not recommended” by the CBC.

Accepting some, but rejecting many recommendations, not only from the CBC, but also from the Town employees, it was no surprise that the Council still faced a deficit.

On January 23, 2010, Linda Abbott made a motion to send a ¼ cent tax increase to the ballot. John Sentz seconded it. The vote is 4-3 in favor, with Mayor Lewis, Jenn Daniels and Steve Urie voting against it.

Steve Urie agreed with Mayor Lewis and Council Member Daniels that more recommendations should have been vetted.

At the time of Ms. Abbott’s motion, she, Dave Crozier, Les Presmyk, John Sentz, and Steve Urie knew full well that the Special Election would cost the taxpayers $250,000. It was only later, when Prop 100 was added to the 5/18/2010 ballot, that Gilbert’s share was reduced to about half that. (All taxpayers in Arizona shared in the cost of the Prop 100 special election.)

The decision to spend $250k and send a tax increase to the ballot caused Gilbert residents to speak out at subsequent Council meetings trying to stop it from going to the ballot. Others spoke in favor.

In favor? How could this be? Because Ms. Abbott fashioned this tax increase to be dedicated to “public safety,” some citizens truly believed the scare tactic that “67 Gilbert police and 29 fire personnel” would be laid off. (They weren’t.) Also, keep in mind that there are citizens who benefit from tax increases: government employees, retired government employees, and citizens who benefit from tax-subsidized recreational programs and other special interests.

And then an astonishing turn of events occurred. On 2/9/2010, minutes before a Council meeting began, Town Attorney Susan Goodwin informed Mayor Lewis that it was against ARS 9-500.14(A) for citizens to speak out either for or against the tax issue during “Communications from Citizens” anymore. In the Town Attorney’s view, those citizens were “campaigning,” using Town resources to influence the outcome of an election.”

What we were doing was “petitioning the Government for a redress of grievances.” (See Amendment I, Constitution of the United States.)

This ban was dropped when a group of Gilbert citizens appealed to the Goldwater Institute for help. Carrie Ann Sitren, an attorney with GWI, wrote a letter to the Council advising them that ARS 9-500.14(A) did not apply to citizens. (See Gilbert Watch’s post, Goldwater Institute Enters Free Speech Fracas")

Prop 406 failed on 5/18/2010, with 57% of voters opposing the tax hike. It wasn’t even close.