Higher property tax likely to stir revolt

The Arizona Republic
Friday, August 3, 2007
Bob Schuster

If you're a homeowner, you'd better brace yourself. You'll be getting your property-tax bill soon. And it will be higher than last year's. In many cases, much higher.

So high, in fact, that it might prompt you to join Arizona's fledgling tax revolt. At least two initiatives are being proposed that would prohibit local taxing entities from reaping windfalls when property valuations soar, as has happened in Maricopa County the past few years.

Property owners in Gilbert, where assessed values are up 60 percent over last year, could see the biggest tax-bill hikes in the Southeast Valley, but those in Chandler, Tempe and Ahwatukee Foothills can also expect hefty increases. That's because city councils did not adjust secondary property tax rates to compensate for the huge valuation increases.

While some municipal officials boasted of "holding the line on tax rates," they had to know that maintaining the same tax rate as last year into the new tax year would pull in a bigger pot of tax money because the rate would be applied to a much larger valuation base.

Mesa residents are at least partially off the hook because the city has no property tax. But the school district, county, community colleges and other taxing entities within the city also levy property taxes, and the overall bill is likely to be higher this year.

The eagerness of neighboring cities' elected officials to cash in on rising property values will surely give Mesa's anti-tax crowd more ammunition to keep the city property-tax free. Which is unfortunate because, while neighboring cities are reaping more than they should, Mesa is so starved for cash that emergency services are stretched and streets are crumbling.

No one is more concerned about the property-tax mess than Kevin McCarthy, president of the Arizona Tax Research Association, who has mixed feelings about the looming tax revolt. McCarthy told me he doesn't support the initiatives because they would be too extreme.

Instead, McCarthy wants the Legislature to enact the same kinds of controls on secondary property taxes as it has enacted, with ATRA's backing, on primary property taxes.

State law now limits increases in primary property taxes, which help pay for governments' day-to-day operations. But those limits don't apply to secondary property taxes, which are used to pay off debt.

But isn't paying off debt early a good thing? Not if it just paves the way for more debt, which McCarthy says is too often the case. And while there is a pressing need for new roads, utilities and other infrastructure in rapidly growing parts of the Southeast Valley, shaking down existing property owners to support that growth isn't smart public policy.

Some city officials have been quick to rationalize that municipal property taxes only make up about 12 percent of the total property tax bill in Maricopa County, and that city residents want more and better services and amenities like parks.

But a little here and little there adds up. This year it will add up big time for thousands of homeowners. And when the bills start arriving there will be audible yelps of pain.

The tax revolt will be under way. And city officials' rationalizations will be drowned out by angry taxpayers' demands for relief.