So What Is the Sales Tax Initiative Anyway?

There's been a deluge of stories recently about how a proposed sales-tax initiative in Glendale will be placed on the ballot for a public vote in November. This action has concerned many Coyotes fans, particularly because it has been widely reported that the sales-tax increase is tied to the lease agreement signed with Greg Jamison. The reality is that this simply isn't the case. Here's a look at what the sales-tax actually is and how it really relates to the Phoenix Coyotes deal.

The sales-tax increase was approved June 12th by the city council as a part of several changes to Glendale's taxation rates that were designed to offset a budget deficit of approximately $30 million. The sales tax is actually a two-tiered increase; the city council opted to reduce the rate on purchases above $5000 from their original proposal at the behest of many small businesses who were concerned that customers would only make big purchases in neighboring Phoeinx or Peoria. The sales-tax itself is estimated to bring $23 million to the city. It will "sunset", or revert back to the original lower rate in 2017.

The initiative is being pushed by an organization named Save Glendale Now, which is bankrolled primarily by Sanderson Ford and the Homebuilders Association of Central Arizona. The goal of the intiative, as registered at the Arizona Secretary of State's office, reads as follows:

On June 12, 2012 the Glendale City Council voted to increase the transaction privilege 3 (sales) tax rate by seven-tenths percent for all types of transactions except residential rental, mining, and transient lodging. This initiative would reverse the sales tax increase by amending the City Charter to set the sales tax rates for all transaction categories at the rates in effect prior to the increase and require the Council to receive approval from a majority of the qualified electors voting on the question at an election prior to any future sales tax increase.

The City of Glendale has contended that this description is misleading, primarily because an initiative cannot retroactively reverse a measure approved by the council. SGN contends that since the measure only caps the sales-tax rate permissible in the City Charter, the city council would have to take another vote to fall back into compliance with the charter and reduce the rate. If the voters do end up approving the measure, there is a very strong possibility that it will end up back in court again.

So how does this actually affect the Phoenix Coyotes? At best, indirectly. The city approved this measure to offset cuts in other departments that would become necessary without this revenue. The lease agreement between Glendale and Greg Jamison is not affected or modified by the deal. What is has done is create some anxiety among Glendale officials who have informed Jamison they'd like to rework the agreement, likely with a contingency in case this initiative does pass in November. This is the primary reason why the agreement has not been signed yet (and could be the reason why Shane Doan ends up leaving the Valley). So yes, there is a link between the lease agreement and the sales-tax initiative, but the sales-tax initiative in no way dictates the fate of the Jamison deal.