Senate OKs cap on property taxes

Capitol Media Services
Tuesday, March 7, 2006
Howard Fischer

State senators approved their own version of a property tax revolt Monday. Without a word of dissent, the Senate gave preliminary approval to a measure to cap the year-over-year increase in the taxable value of homes and businesses to no more than 2 percent.

The voice vote comes within days of homeowners getting their latest notices from county assessors showing their new valuations. In some cases, hikes have been in the 50 percent range.

It also comes on the heels of the filing of a more farreaching initiative drive, one that actually would roll back home values to 2003 levels. And if SCR1025 survives the full legislative process, it would be on the November ballot in competition with that measure.

Several Democratic legislators said after the hearing they may oppose the measure when it comes up for a final roll-call vote, possibly later this week. But they acknowledged the public outrage over the issue and the increasing sentiment that if the Legislature intends to cut taxes this year, the relief should be for property owners.

“I think there’s definitely going to be a revolt,’’ said Sen. Ken Cheuvront, D-Phoenix. And Cheuvront, who also owns a wine and cheese bar, said property tax relief is far more preferable — and useful — to businesses than the income tax cuts being pushed by some legislators.

“Something’s going to be done,’’ added Sen. Harry Mitchell, D-Tempe, the second-ranking Democrat in the Senate.

That’s also an assessment many Republicans share. “When our constituents in 2007 get their property taxes, we’re going to have a riot on our hands,’’ said Sen. Carolyn Allen, R-Scottsdale.

Valuation increases have come under increasing scrutiny because they allow city, county, school and other levels of government to collect more money without having to raise the tax rate. In fact, simply leaving the rate untouched automatically would bring in more cash because of the inflation in taxable values.

The resolution is being pushed by Sen. Ron Gould, RLake Havasu City. He represents the area where the latest tax revolt is brewing, led by Ia group of Bullhead City residents who have formed Arizona Tax Revolt.

Nothing in Gould’s proposal would bar those governments from hiking the tax rate to boost revenues — that is, he said, nothing but politics.

“Generally, that pretty much gets you thrown out of office for the most part,’’ he said.

By contrast, he said, local officials “continue to say they haven’t increased your taxes because they haven’t raised your rate.’’

Gould’s measure, unlike the initiative — and unlike California law — does not contain a valuation “reset’’ when a home is sold.

“That ends up being a problem because you have somebody that’s lived in the neighborhood for 20 years pays $1,000 (in taxes) and somebody new moves into the neighborhood and they pay $3,000,’’ he said.

Gould’s measure also contains no rollback, as does the initiative, with current values becoming the base for the 2 percent annual increase