Proposed sales tax hike in Glendale could force shoppers elsewhere

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by Carina Sonn

azfamily.com

Posted on May 30, 2012 at 7:54 PM

Updated Wednesday, May 30 at 8:00 PM

GLENDALE, Ariz. -- A proposed sales tax hike in Glendale has some sellers of big ticket items upset.

The city is trying to fill a $32 million dollar gap for the next fiscal year, and has given preliminary approval to a budget that would raise property and hotel taxes. It would also raise sales taxes by .7% up to 2.9%, making it among the highest in the state.
“I think we’ve shown our commitment to the city, we just hope that it goes back the other way,” said Dylan Mougel, manager at Mark Mitsubishi.
The dealership has been on Glendale Avenue since businesses filled the once-busy strip, recently enduring a recession and laying off half of its employees.
“We’re not happy about it, we’re obviously concerned. A lot of dealerships have left Glendale Avenue already, and we’ve been staying here for 17 years,” Mougel said.
Other businesses that sell expensive items like furniture and jewelry would also be affected.
Scott Bohall owns Treasures Custom Jewelers, selling custom-made pieces for as much as $25,000.
“It’ll make us one of the highest tax rates in the country and on a product like mine it’s a significant amount of money. I think it’s a colossally bad idea,” Bohall said.
The tax increase could possibly entice shoppers to go elsewhere, like Chandler or Gilbert, where taxes are only 1.5%.
But Glendale as a whole says the move is necessary, blaming the shortfall on a lack of tax revenues in recent years and Jobing.com Arena, which will receive $17 million for maintenance if the budget is approved.
“Most cities and most businesses have had very difficult times over the last couple of years and Glendale is no different,” said spokeswoman Julie Frisoni.
Councilman Philip Lieberman is one of a few who voted against passing the budget. He used to sell boats and motorcycles himself on Grand Avenue.
“I had people go to Casa Grande to save $50 on the price of a motorcycle. The car dealers will be in the exact same position,” Lieberman said.
Paperwork for a referendum has been put into motion. If enough signatures are gathered, it would force a city-wide vote on the proposed tax hikes.
The Council is holding two more public meetings with final passage of the budget expected at the end of June.
Mougel doesn’t know what will happen after that.
“We’re committed to this city but obviously this is a frustrating point for us and I don’t know what’s going to happen,” Mougel stated.
“I’m disappointed, I like most of [the council members] and I feel like they usually make good decisions and this one, I just think they’ve not thought this completely through,” said Bohall.

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