GLOBE — A presentation from Destiny School’s Mrs. Dixon and her 6th grade class was given to the share the display that won Best of Show at the Gila County Fair. The class project was a replica of downtown Globe.
A 5-2 vote by the Globe CIty council was made on Tuesday, Sept. 26 approving Ordinace No. 849. rescinded Ordinance No. 787 thereby repealing the $15,000 Cap on a single item retail sales in the City of Globe. Ordinance No. 787 which was put into place March 14, 2011 during a difficult time for the economy, and the intent was to try and keep as many businesses open in Globe as possible.
Carol Cox read a letter on behalf of the Southern Gila County Economic Developemnt Corporation Board stating: “Dear Mayor Gameros and globe city council members, it is the understanding of the southern gila county economic developemnet corporation, that the globe city council is considering a proposal to eliminate the current city sales tax exemption for purchases over $15,000. The SGCEDB wishes to take this opportunity to express their concern for the economic impacts that could happen as a result of eliminating the current sales tax exemption. The city of globe and surrounding region already suffer from tremendous economic leakage, those dollars that are being spent outside of the community as a result of limited product availability and selection or higher prices due to taxes and transportation costs. It is difficult for local businesses to remain competitive when residents are already leaving the community to shop. Being competitive is absolutely essential to our local business and our local economy. The SGCEDB understand that the city needs to increase revenue to address budget short calls. However, the SGCEDB would like to encourage the city to support local business efforts to increase volume of sales, and therefore tax revenues,
tax revenues, instead of eliminating this competitive advantage on large purchases. Most municipalities understand the economics behind supporting local businesses with tax advantages and engage in policy that creates a win for both, the municipality and the local businesss. There is not only the direct loss of revenue due to reduction in volume of sales to consider, but there is also the local business multiplier. Research shows that for every $100 spent at a locally owned business, $73 remain in the local economy. That multiplier creates jobs, and supports other local businesses that serve employees and other local purchases. Locally owned businesses are critical to the economy of Globe and tax base of Globe. The sgedbc believes that eliminating the sales tax exemption for purchases over $15,000, will be detrimental to the local business and the city’s bottom line. We would love to work with city council and staff to identify other strategies for increasing revenue for the city of Globe. Thank you for time and let us know how we might help the city with this challenge. The Southern Gila County Economic Developement Board”
Ellen Kretch of the Chamber of Commerce previously read a letter to the council stated that they believe it is very important to keep the cap as it is now. The believe that a probusiness climate is very important to keep the money locally with all advantages possible.
Udon McSpadden, owner of McSpadden Ford addressed the board again. Throughout the continued discussion and public statements concerning the possibility of rescission, McSpadden has been helpful with providing number to th council to review. He also stated that the tax cap has helped with the advantage of saving on bids with the local mines and Gila County. With every sale it generates sales tax for the city of Globe bringing more revenue. Employees at McSpadden has even increased since the tax cap has put in place. McSpadden hasn’t pocket any of the money, he was able to relocate onto HWY 60. McSpadden even waives the dock fee that all other dealerships charge. The program is one that has worked great for the McSpadden local business, and one he’d like to see stay.
City Manager Paul Jepson went over the numbers showing that their is an estimated $90,000 to $120,000 annually not being collected by the city. Jepson mention that some cities even have two tier tax systems for attracting business. Staff recommend that the council repeal the tax cap to benefit all members of the community.
Council member Lerry Alderman said that he owes it to the community to put them over one or two businesses that benefit from this.
Council member Freddy Rios said he doesn’t take the decision lightly, but he must make a decision for all of Globe.
Council member Roberta Johnson said she appreciates all that Udon does for the community, but this issue isn’t about any individual or individual business and she has a problem that it only benefits certain business, because all the other business are paying full sales tax.
Council member Mike Humphrey said it was a tough decision, congratulated Udon on his business, but it is for the good of the whole; and would like to see it revisiting a year or two.
Council member Charlene Giles liked the idea to revisit, and said that McSpadden was a good business and good for the community, but this is for every resident.
Vice Mayor Mike Stapleton thank the McSpadden team for expanding onto the highway and
Mayor Gameros said we all have opinions and all council members took time to research the item.