South Tucson’s sales tax increase felt most by businesses, residents

South Tucson sales tax hike

SOUTH TUCSON, Ariz. (KOLD News 13) - The City of South Tucson city council narrowly approved a measure increasing the city’s sales tax rate to 11 percent on Monday, leaving citizens and local business owners scrambling to cope.

“People in South Tucson appreciate having a bike shop in their city, but now I’ve got to think about how this is going to affect me long term,” said Noe Mencias, owner and lone employee of Cicli Noe Bike Shop on South Sixth Avenue.

The tax hike affects utility, communication, and retail businesses.

After struggling through the tariffs on China, having to pay even more local sales tax is a double-whammy for Mencias.

"So now tubes went up (because of the tariffs), and if you are in South Tucson, tax went up so now you're paying a little extra premium for the same product."

“That makes me open my eyes up, that’s kinda ridiculous,” said Alvin Rose, who lives in South Tucson. He is not a fan of raising taxes in a community where the census bureau reports 47 percent live in poverty. “This increase is going to hurt from top to bottom.”

The increase comes when South Tucson is facing budget deficits, and the revenue collected will go towards paying firefighters and maintaining public services.

“We were facing a $300,000 deficit and we were looking for ways to reduce that deficit,” said John Vidaurri, city manager for South Tucson. He says the increase is not something they wanted to do, but something they had to do. “To be able to have the city of South Tucson survive, that where we’re at - we’re in survival mode.”

Back at the bike shop, Mencias says he loves his location and loves his community, but believes the city should be helping local businesses grow, not holding them back.

“It is not fun to be in this position and that’s why right now I’m at a standstill,” said Mencias. “We watch as the fog clears and then we start making decisions but it’s going to be a challenge.”

South Tucson has a five-step plan to try and balance its budget over the next fiscal year.

Officials believe the sales tax increase could bring in an extra $123,000 a year.

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