Smith: New Preserve language could falter true Scottsdale bounty

Scottsdale City Council has added language to its strategic plan to “prioritize remaining acres within Preserve boundary and develop acquisition plan based on projected funds.”

That sounds like a good idea, until you remember the remaining acres are zoned for residential development. In a bidding war against developers, we would have to pay several hundred thousand dollars per acre, instead of the $25,000/acre we’ve historically paid for Preserve lands.

David Smith

The new language was added after reviewing a Preserve Fund long-range forecast prepared by city staff. That forecast compared estimated future income against the expense of paying off the remaining debt on over 30,000 acres of preserve land we’ve already acquired.

The forecast also considered the planned cost of trails, trailheads and parking lots on preserve land. Staff’s conclusion was the Preserve Fund could have as much as $100 million unspent when the temporary preserve tax expires.

There are inherent uncertainties with any forecast, but before we make plans to spend the future balance on more land at this high price per acre, we should consider other options that might better serve all taxpayer interests.

First, let’s remember the voters’ direction in 1995 and again in 2004 was to temporarily tax themselves (0.20% until 2024 and 0.15% until 2035) and spend those tax receipts to acquire land for the preserve, construct improvements and pay associated financing costs. To separately account for income and expenses, the city created a Preserve Fund and each year deposited the tax receipts as well as any interest earned on unspent balances.

— David Smith, Scottsdale community advocate

Adding interest to the fund may have been a conservative accounting practice in the early years, but it wasn’t directed by voters. By 2035, all those interest deposits to the Preserve Fund will probably account for $25 million of the $100 million projected bounty. Simply reversing this accounting practice to follow the voters’ explicit directions would make those interest earnings available where they are more desperately needed.

Second, let’s consider partially repealing our tax on food purchased at grocery stores — the most punitive tax any governmental body can impose upon its neediest citizens. Again, a council majority could make this happen by simply voting to eliminate the 0.35% preserve tax on food.

It’s certainly justified, since the food tax is simply accumulating unspent in the Preserve Fund. In fact, unless eliminated, the preserve’s food tax between now and 2035 could account for as much as $50 million of the forecast $100 million projected bounty. Reducing the city’s sales tax on food from the current 1.75% to 1.40% would provide savings for every citizen who buys food at the grocery store.

— David Smith, Scottsdale community advocate

Finally, if these two actions are taken, and if the forecast holds true, the Preserve Fund would still have roughly $25 million cash by 2035 when the last preserve tax expires. So, sometime around 2032, when the Preserve Fund has a cash balance big enough to meet all remaining debt service … let’s just stop the tax early! Who wouldn’t applaud an early sales tax cut?

When local government leaders find themselves confronted with a bounty of extra money, often their first reaction is to hunker down and figure out, “How can we spend it?” It would be refreshing to hear a robust discussion of more creative possibilities, several of which might better serve all Scottsdale citizens.

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