Property taxpayers across Arizona are alarmed. They have been receiving notification from county assessors across the state that the taxable value of their property is again increasing.
Their anxiety is certainly justified because experience tells them that increases in assessed value will translate into higher property taxes when local governments set their budgets.
Some taxpayers are exploring the possibility of joining a handful of tax-revolt efforts that are brewing around the state.
Valuation increases do not have to result in tax increases.
Let me illustrate. Since 1998, the Arizona Legislature has decreased the property tax rates it controls to reflect increases in assessed values on existing properties through a mechanism called "truth in taxation" (TNT).
From its enactment to the present, the state's TNT law has saved Arizona property taxpayers over $750 million. The state budget the Legislature is currently working to put together will include another TNT rate reduction, reducing K-12 tax rates 27 cents per $100 of assessed value, saving property owners statewide another $135 million. This has been accomplished without negatively impacting local school budgets.
The fiscal 2008 state budget will also include the second year of a three-year suspension of the state equalization property tax rate, saving taxpayers well over $200 million for each of the three years that suspension is in place.
In addition, I am supporting legislation that will make this tax relief permanent by repealing the state equalization rate.
The Legislature has also enacted several changes in recent years to limit the authority local taxing jurisdictions have had to increase taxes without voter approval.
Similarly, property taxpayers will benefit from last November's voter approval of Proposition 101, a constitutional amendment that was referred to the ballot by the Legislature last session. This new law will ensure that counties, community colleges and cities cannot increase primary property tax rates above established limits without voter approval.
In fact, largely due to the Legislature's actions, the current average property tax rate in Arizona is down 57 cents from the previous year.
Of course, this is only a state average. Some local jurisdictions have been responsive to increasing values by decreasing their tax rates, sometimes by adopting TNT rate reductions. Many local taxing authorities, however, have been much less responsive.
Arizona's citizens elect their state and local leaders to provide stewardship of governmental institutions and its finances. In my view, the fundamental fiscal responsibility of elected officials and other public leaders should be to ensure that the tax systems producing revenue — whether from property, income, or sales — do not collapse under their own weight.
Without question, voters play an immeasurably significant role in this process. Voters elect the leaders who make property tax decisions. More directly, of course, voters approve local bonds and budget overrides, and even create new taxing districts.
In all too many cases, however, state laws and election practices can make the connection between such elections and property taxes less than transparent.
I call on members of every council and board with property taxing authority throughout Arizona to respond proactively to the rapid increases in property valuations. In most instances, this can be done by using a TNT calculation to determine a reduced tax rate that offsets the rising value of existing properties.
If elected officials are not careful with the authority voters have given them, frustrated voters may take it away.