The Town of Gilbert is the target of a lawsuit by the Goldwater Institute on behalf of the Home Builders Association of Central Arizona and a local property owner, Jonathan Barth, for allegedly violating the Arizona Constitution which bans tax increases on “services.”
According to Goldwater, the tax increase imposed by the Town of Gilbert includes “many types of business that do not produce tangible goods, such as advertising, photography, utilities, hotel/lodging, and construction.”
Goldwater is challenging two of the tax increases in particular: on homebuilding and short-term rental properties.
Lawsuit Alert: The Goldwater Institute challenges Gilbert’s illegal pickleball tax.
Gilbert officials are hiking taxes to fund pickleball courts, splash pads, and even a ropes course—all in violation of the Arizona Constitution. Here’s what you need to know: 🧵
As noted in the text of the lawsuit, the Arizona Constitution prohibits “any county, city, town, municipal corporation, or other political subdivision of the state, or any district created by law” from creating any new or increasing any existing transaction-based taxes on the “privilege to engage in, or the gross receipts of sales or gross income derived from, any service performed in this state.”
The new tax ordinance in question, per the Town of Gilbert’s website, imposes a 0.5% increase in the existing sales tax and creates a “use tax” to be “paid for by residents and businesses when purchases are made online with out-of-state vendors who do less than $100K of sales in Arizona per year.”
The lawsuit explains that, “As a result of the Ordinance, individuals, businesses, and taxpayers, including Plaintiff Jonathan Barth, who engage in the rental or lease of real property, including for transient lodging, will pay a higher tax rate for the services they perform. Additionally, individuals, businesses, and taxpayers that engage in general contracting services, including the members of Plaintiff Home Builders Association of Central Arizona (“HBACA”), will pay a higher tax rate on the services they perform.”
Barth, an educator and father of five, will be impacted because he earns supplemental income by managing his detached bungalow as a rental for short-term tenants. He told Goldwater, “This tax hike makes it all the more difficult to make ends meet in Gilbert.”
Former Mayor Brigette Peterson and all of the members of the Town Council are named as defendants in addition to the town itself.
The town allegedly intends to use the projected $55 million yield of this new tax for “Critical Infrastructure Projects,” adding that “Time is of the essence as many of Gilbert’s services are over capacity and new infrastructure is needed.”
The Goldwater Institute has found however, that these “Critical Infrastructure Projects,” include pickleball courts, splash pads, a ropes course, and a “statement” bridge.
The Home Builders Association of Central Arizona (HBACA) told Goldwater that the new taxes will result in increased construction costs in the town as well. HBACA CEO Jackson Moll warned, “Gilbert officials are trampling on their own constituents’ rights with no regard for the consequences their illegal actions will have on taxpayers and homebuyers. The Arizona Constitution is clear: increasing taxes on services, including on construction contracting, is unlawful.”
As previously reported by AZ Free News, the Goldwater Institute pursued a similar action against the Town of Payson in September when the Town Council decided to incur a $70 million debt via a bond measure without a public referendum.
The Gilbert Town Council handed down a harsh wake up call to the Gilbert Police Department (GPD) in late December. In a meeting, the town denied a request by the GPD to be exempted from a municipal code which levies a fine against building owners if a business or organization has three or more false alarms in a given calendar year. Essentially, the town has told the department that it will have to continue to fine itself.
According to the East Valley Tribune, Assistant Police Chief Michael Angstead told the council that the department currently fines itself and cuts the city a check. “Currently, as an example, we have an alarm on our property and evidence building,” Angstead told councilmembers. “And it’ll go off from time to time because rabbits will get out into the open part of the facility, where we can’t have people running around because there’s evidence outside.” An officer is reportedly dispatched to check each alarm.
In the text of the meeting’s agenda item, Chief of Police Michael Soelberg wrote, “As an example: currently, if the Gilbert Police Department’s Property and Evidence building has an alarm—false or otherwise—the Gilbert Police Department is dispatched to investigate. If the Gilbert Police Department’s officers determine the alarm was false, and there have been three or more false alarms within a calendar year, the Town of Gilbert shall charge the Gilbert Police Department for sending Gilbert Police Department’s officers to respond to a Gilbert Police Department building’s alarm. This amendment will help the Town avoid expending the resources to fine itself, and other government agencies, for the response to false alarms, but notifications will still be made to encourage remedies to the false alarms.”
According to the False Alarm Assessment Schedule provided in the proposal, the fine starts at $50 after the third alarm and increases by $50 with each subsequent alarm up to the tenth, capping at $400 per alarm for all subsequent alarms.
The department’s requested amendment wasn’t limited to its own buildings but also included town-owned buildings as well as county, state, and federal properties. However, the council still turned it down.
The next is on false alarms, exempting government facilities from the fines, because ordinance requires the town to fine itself. Tilque says we should hold ourselves to the same standard we would business. Why would we have this in first place? Need to have same corrective action
Councilwoman Kathy Tilque, who did not seek re-election in 2024, opposed the department’s request. As reported by the Tribune, she explained, “I always believe that if we pass a law to regulate and fine businesses, we should hold ourselves accountable to the same standard,” she said.
“While I understand it seems redundant to process fines within internal departments, the bigger issue is, why do we have this law in place to begin with?”
“I’m prepared to let this die right here,” she said, pushing back against exempting county, state, and federal buildings as well.
Fellow Councilman Chuck Bongiovanni concurred with Tilque and agreed that if the town’s residents and businesses must comply with the statute, the town should be held to the same standard.
Last Wednesday, the town of Gilbert apologized for creating a document ranking residents based on their support or opposition of a road widening project.
Maricopa County island resident Rich Robertson presented the document to the Gilbert Town Council during last week’s meeting item discussing the project. The document listed the affected homeowners, their parcel, their address, the landowners’ stance on the project, and a “vocal level” of 1-4. A rating of “1” indicated the resident was among the most vocal in opposition, while a rating of “4” indicated that the resident was reasonable.
“The town of Gilbert has created, effectively, an enemies list,” said Robertson. “Why are we as residents — who are trying to exercise our rights — being ranked by your staff on how compliant we are with you? This is, I suspect, not how the council really wants its residents to be treated. I think it’s outrageous.”
The city issued an apology statement last Wednesday from Public Works Director Jessica Marlow.
Marlow apologized for using the “vocal level” category, and said that the intent wasn’t to label anyone. She explained that the intent was to prepare city leaders for meetings with affected homeowners last October. Marlow admitted that the document should’ve been named differently, in hindsight.
“It was meant to help staff better understand how to address concerns ahead of the meetings,” wrote Marlow.
Awareness of the issue was made possible due to three freshman council members who placed the item on last week’s agenda: Jim Torgeson, Chuck Bongiovanni, and Bobbi Buchli. The trio and Mayor Brigette Peterson vocalized their dismay over the document. The mayor noted that she wasn’t aware of the document before the meeting, and apologized.
“I don’t know anything about it, and I am just appalled that something like that might be going around,” stated Peterson. “I do believe that you don’t deserve any of that. I apologize for that.”
Robertson, who was rated a “2,” rejected the city’s claim that the classification wasn’t intended as a list of enemies.
“I think that’s what leads to those kinds of characterizations,” said Robertson. “It certainly wasn’t inadvertent. It was clear that it (the document) was intended to identify the people who were problems and to steel themselves against those people.”
Robertson speculated that he received the “2” ranking due to writing letters frequently to the council.
The project that inspired so much controversy about residents intended to widen Ocotillo Road into a 110-foot right-of-way. The expansion would require several new bridges to span a section of missing roadway. It was included in the FY2023-2032 Capital Improvement Plan, with funds from 2022 General Obligation (Transportation) Bonds.
Watch the discussion of the “vocal level” controversy below:
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
An order last month by Gilbert Mayor Brigette Peterson for town police officers to remove three people from a council meeting has resulted in a notice of claim being served against town officials for First Amendment violations.
A notice of claim is required under Arizona law before a party can initiate a lawsuit against a public entity. On Thursday, such a notice was served on the Gilbert mayor and council members on behalf of Ryan Handelsman, Dr. Brandon Ryff, and Joanne Terry, who contend they were forced out of Sept. 20 town council meeting for engaging in constitutionally protected speech.
According to attorney Tim La Sota, his three clients attended the meeting during which dozens of protest signs were taken into the council chambers. Some of the signs were printed with the phrase “Stop Lying” while others read “Don’t Mesa My Gilbert.”
Peterson interrupted the meeting at one point and ordered a Gilbert police officer to remove a 6-inch by 24-inch “Stop Lying” sign Terry was holding in the back of the room. Terry set the sign down and the officer did not confiscate it.
A short time later, Handelsman addressed the mayor and council during the call to the public to challenge town officials to cite a statute or code being violated by those holding signs. Then Handelsman, Ryff, and Terry each decided to silently hold their signs.
“The Mayor halted the meeting and ordered the police to remove Dr. Ryff, Mr. Handelsman and Ms. Terry from the room. The police escorted them out of the meeting without incident,” according to the notice of claim, which notes the town code does not prohibit signs in the council chambers.
A First Amendment obstruction or retaliation violation could cost the town tens of thousands of dollars in legal fees plus potential damages to each of the three claimants. However, La Sota says his clients will settle for $1, but it will also cost something other than money.
In exchange for a complete release of their claims, the claimants will accept $1 as damages if Peterson and the town of Gilbert issue an official apology, La Sota wrote. In addition, Peterson would have to attend a First Amendment training class.
According to the notice of claim, Handelsman, Ryff, and Terry acknowledge that the government “need not tolerate actual disruptions of government business” and that courts have held that municipalities may enforce “certain free-speech restrictions.”
But those restrictions apply to time, place, and manner of public comment, La Sota noted, and even then courts have ruled such restrictions “must be reasonable, consistently enforced, and fall within constitutional parameters.”
Free speech restrictions by the government are also reviewed to ensure they “are both viewpoint neutral, equally and consistently enforced, as well as narrowly-tailored to meet the needs of the governing body to conduct its business, free of actual disruptions,” La Sota noted.
It is also not allowable to engage in retaliation against someone for asserting their First Amendment rights, which is what the notice of claim alleges Peterson did when she ordered Ryff removed. La Sota points to Ryff’s critical comments about the mayor during his call to the public comments at the prior council meeting.
“Then, at the very next meeting, 50 ‘Stop Lying’ signs show up with essentially the same message,” the notice of claim states, adding that Ryff contends Peterson believed Ryff was responsible for the signs.
“Dr. Ryff’s rights were violated by a vindictive Mayor who seized the opportunity to retaliate against him for years of political opposition and for having filed ethics complaints against her in the past,” the notice of claim states.
The notice of claim further alleges Handelsman, Ryff, and Terry were not being disruptive in how they displayed their signs at the Sept. 20 meeting. It also contends Peterson did not treat all sign-holders the same during that meeting, including an attendee with a visible “Don’t Mesa My Gilbert” sign who was not forced to leave the meeting.
“Certain persons silently holding signs in the back of the room may have been a distraction to the Mayor, but not every distraction is necessarily a disruption and not every disruption is an actual disruption which impedes the ability of the Council to do its business,” La Sota notes, citing a major First Amendment ruling from the Ninth Circuit of the U.S. Court of Appeals (Norse v. City of Santa Cruz, 2010).
Peterson later commented on her actions, arguing she could not read what was written on the signs. Yet that does not explain why his clients were ordered out of the council chambers while others with signs were allowed to remain, La Sota wrote in the notice of claim.
Town officials have 60 days to reject or accept the settlement demand included in the notice of claim.
If there’s one entity that specializes in giving people something they don’t need—or aren’t even asking for—it’s the government. So, naturally, while the country faces sky-high inflation and Arizonans make sacrifices in their family budgets, the Town of Gilbert saw fit to discuss a potential…commuter rail.
That’s right. At the end of April, the Gilbert Town Council announced that it’s considering a $289,000 consulting contract for a feasibility study on establishing a commuter rail. What this would accomplish—and why anyone thinks this would be good for Gilbert—remains a mystery.
Even before COVID, public transit usage has been on the decline. And that’s only worsened since…
