A legal fight playing out in Phoenix could undermine the plans that Pima County has to pay off its Kino Sports Complex.
On Tuesday, Maricopa County Superior Court Judge Dean Fink ruled that proceeds from a tax on rental cars could not be used to finance the football stadium built for the Arizona Cardinals. Fink said the levy runs afoul of a state constitutional provision limiting how taxes on the use of roads can be spent.
Fink’s decision on the Maricopa levy likely sets no precedents — and certainly not in Pima County.
But Timothy Berg, attorney for the Maricopa County Sports and Tourism Authority, has said an appeal is likely, perhaps all the way to the Arizona Supreme Court. And if the justices there find the Maricopa County tax legally unjustified, then the levy in Pima County would be subject to challenge.
Even if the fight over funding for the Cardinals stadium is legally different, that does not end the matter.
Attorney Shawn Aiken, who successfully sued to void the stadium tax, already has filed a separate lawsuit challenging the use of car rental taxes to finance spring training facilities. And that clearly covers the Kino complex even though the Cactus League teams have left.
All that concerns Pima County Administrator Chuck Huckelberry.
He said such a ruling would deny the county about $1.3 million a year raised by its own car rental tax. And that levy is necessary through 2017 to pay off the $38 million borrowed for the complex.
Potentially more significant, it could force the county to refund to the car rental companies that paid the tax at least some of what already was collected.
The issue arose more than a decade ago when Maricopa County sought to keep the Cardinals from moving out of Arizona.
Officials agreed to build a new home for the team where it would control more of the revenues than it did at Sun Devil Stadium at Arizona State University. While the team put up some of the cash, $274 million was financed through both a “bed tax” on hotel rooms and that levy on rental cars.
Rental car companies sued, pointing to that constitutional provision which says that any funds raised from fees, excise taxes and licenses relating to the operation or use of vehicles on highways can be used only for road construction and maintenance.
Berg argued on behalf of the Maricopa sports authority that the levy really isn’t a tax on the use of vehicles on highways but on the business of renting cars. But Fink said that ignores the obvious nature of why people rent cars in the first place: to use them on roads.
“Obviously no customer would go through the trouble and expense of renting a car only to leave it in the parking lot,” the judge wrote.
Huckelberry said what’s happening in Pima County is little different.
“It’s the same thing,” he said. “It was to pay capital for the debt service on our stadium.”
He said the tax, which the county started collecting in 1997, has raised as much as $1.5 million annually in good years and perhaps two-thirds of that in leaner years.
Adding fiscal insult to injury if the Pima tax eventually gets whacked is the fact that the reason for it has gone away.
The complex originally was built primarily to provide spring training facilities for the Dodgers and the White Sox. Both teams have since left for more expensive digs built by taxpayers in Maricopa County.
“We still have this operating cost,” Huckelberry said, meaning the need for the tax remains.
“I would feel kindly about getting rid of it if somebody hadn’t stolen our teams,” he said.
Huckelberry said the facility remains used and useful even without the big league teams.
The Tucson Padres, a Triple-A baseball team, has returned to the city. And Huckelberry said efforts are underway to lure a Double-A team to Tucson.
There are other revenues.
“We’ve now become kind of this mecca for collegiate spring training,” he said, with the county also generating revenues from soccer as well as other amateur and collegiate baseball.
Those funds are needed.
Huckelberry said the county was collecting about $1 million a year from spring training for the two professional teams, a figure that plummeted to $150,000 immediately after they left.
“Well, I think we’ve probably got it up now to pretty close to $1 million,” he said.