City may consider tax for arts, culture – Revenue would fund long-planned Scottsdale tourist sites

By Beth Duckett – January 29, 2013
The Republic |

Scottsdale has relied on tax in­creases to pay for projects ranging from the McDowell Sonoran Pre­serve to an expansion at WestWorld.

Now supporters say a sales tax dedicated to arts and culture could bankroll marquee attractions such as a Desert Discovery Center and Western-themed museum that have fallen by the wayside during cash­strapped times. In coming weeks, City Council­woman Linda Milhaven wants to create a citizens’ task group to ex­plore an arts-and-culture tax that would generate millions of dollars a year.

She said a small sales-tax incre­ment — two-tenths of a cent or 2 cents on $10 — would help make possible projects including a Dis­covery Center, a Scottsdale Mu­seum of the West and an outdoor performing-arts venue, which have been on the city’s radar for years but lack funding.

“Arts and culture have been an important part of our community identity for our entire history,” Milhaven said.

Critics say the timing isn’t right — and may never be. Scottsdale and other Valley cities have more to lose compared with the state because consumers don’t have far to drive if they want to pay a lower sales-tax rate, Vice Mayor Dennis Robbins said. He added that sales of cars and other big-ticket items are often the hardest hit.

“I don’t think more sales tax is the right way to go,” Robbins said.

Similarly, Scottsdale Mayor Jim Lane was unaware of the proposal until just over a week ago but said he was unlikely to support a tax increase at this time.

The $74 million Discovery Center, envisioned as a desert-themed tourist attraction and educational hub at the foot of the McDowell Mountains, recently was dealt a blow when Scottsdale didn’t receive any responses from non-profits interested in operating the center. A mix of public and private funding is likely needed to make the project a reality.

The long-planned Museum of the West would be an anchor in the city’s popular arts district west of Scottsdale Road, not far from Scottsdale Fashion Square and the Scottsdale Waterfront. Current projections showed a price tag of $13.5 million to $13.6 million.

In Scottsdale, small chunks of salestax revenue go toward the city’s transportation needs, public safety and the purchase of land for the nature preserve. A slice of the city’s hotel-bed tax also is earmarked for an ongoing expansion of the Tony Nelssen Equestrian Center at WestWorld.

A 0.2 percent arts-and-culture tax, if effective this year, would have generated more than $17million, estimates show.

Scottsdale’s McDowell Preserve tax, which is also two-tenths of 1 percent, is projected to generate $17.3 million this fiscal year, city spokesman Kelly Corsette said. Voters approved it in 1995.

Scottsdale marketing executive Melinda Gulick called the arts-and-culture tax a “win-win” for citizens.

“It’s a really great way for residents in Scottsdale to share the value we place on arts and culture for our quality of life,” said Gulick, who previously served on a committee that studied the Desert Discovery Center.

Many cities, including Scottsdale, collect a 1 percent tax on capital-improvement projects for public art. But a sales tax specifically dedicated to arts and culture is less common.

In 1998, Mesa voters passed a halfcent- on-the-dollar “quality of life” sales tax that was to be set aside for a variety of community enhancements, including construction of the nearly $100 million Mesa Arts Center. The center was built without issuing bond debt and is paid for. The quality-of-life sales tax has since been reduced to a quarter-cent on the dollar.

Another tax initiative wasn’t so lucky.

Three years ago, the non-profit Metro Phoenix Partnership for Arts and Culture abandoned a statewide initiative for a one-tenth of 1 percent dedicated sales tax for arts on the November ballot. Estimates show the tax would have generated $80 million to $100 million a year for arts organizations.

At the time, Sandy Werthman, thenchair of MPAC’s board of directors, told The Arizona Republic that a drop in polling support “showed that we really could not win a November election.” The nonprofit closed its doors in 2010.

A tax hike could face a similar fate in Scottsdale, where voters shot down a school budget-override proposal in November and a bond election in 2010 that would have raised property taxes.

But Milhaven said the tax deserves consideration, since a large portion of Scottsdale sales-tax revenue comes from visitors who dine and shop there. The city has — and would still have — one of the lowest local rates in the region, she said.

At 1.65 percent, Scottsdale’s rate is lower than the Valley-wide average of 2.9 percent, which used the rates of 12 major cities and towns in the Valley. Phoenix, by comparison, has a rate of 2 percent.

The local rates do not include state and county taxes.

The Cultural Council, responsible for performances and many sculptures in Scottsdale public spaces — including the iconic “LOVE” sculpture by Robert Indiana — has not taken a formal position on Milhaven’s proposal.

The non-profit Cultural Council oversees Scottsdale Public Art, the Scottsdale Center for the Performing Arts and the Scottsdale Museum of Contemporary Art.

The council’s board did approve a new Public Art master plan last week. A big element of the guiding plan “is to explore ways to secure a stable source of funding to support public art in our community,” said Richard Hayslip, interim director of the Public Art program.

Public Art relies on the city’s capitalimprovement program and new private construction, which varies from year to year. There are also restrictions on the types of projects the funds can be used for, he said.

“Funding derived from a sales tax could address both of those factors, depending upon the level of the tax and the details as to how the funds are to be used,” he said.

In additional to capital projects, Scottsdale requires private development in the downtown area to pay for public art.

Republic reporter Gary Nelson contributed to this article.

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