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Supervisor warns food sales tax referral, governor's groundwater proposal could hit small-city budgets
Summary
Chairman Montanari briefed the Cochise County Board on legislative proposals being tracked by the County Supervisors Association, highlighting a potential referral of the food sales tax and a governor's groundwater proposal that he said could reduce agricultural pumping by 40% and materially affect local government revenues.
Chairman Montanari told the Cochise County Board of Supervisors on Feb. 11 that the County Supervisors Association is tracking roughly 17 bills that could affect counties, and he flagged several with potentially major financial or regulatory consequences.
Montanari said one measure under discussion would refer the state sales tax on food to the ballot; an SCR to do so could reduce retail tax revenue that some small cities rely on heavily. "It would be probably about a 20 to 23% cut in Wilcox's budget and probably about a 15 to 20% cut in Benson's budget," Montanari said, citing his district-level estimates. He noted that Bisbee and Douglas also rely on grocery and big-box retail sales tax revenue.
Another major item Montanari described was the governor's proposal he called the "rural bridal groundwater management control act" (governor's proposal name as described in the briefing). Montanari said the draft would significantly change groundwater management rules and "requires a 40% reduction of pumping over 40 years, 10 percent per year," language that he said could sharply reduce agricultural activity and property values if enacted.
Montanari said he had received a legislative staff opinion and that talks were ongoing between the governor's office and legislative leaders. He said he had heard from "good authority" that negotiators are likely to seek compromises and that the bill, in its then-current form, might not advance without revisions.
Supervisor Crosby added that the food-sales-tax referral would be devastating to some smaller cities, saying she had discussed the proposal with the mayor of Bisbee and that the loss of the grocery sales tax would equal "65% of their budget," making it extremely difficult for those cities to provide services.
Board members discussed the general trade-offs among property, sales and income taxes, noting that removing one revenue source typically forces adjustments elsewhere. No formal county position on the bills was adopted at the Feb. 11 meeting; Montanari said staff would continue tracking developments and update the board.
