Property Tax

During the epic housing crash, property values fell by almost 50 percent in Maricopa County. Did property taxes fall a similar amount? Not by a long shot.

As homeowners clung to the idea that lower tax bills would be one small consolation of the bust, schools and cities and fire districts and hundreds of other government entities stared down their own financial crises in the five years from 2008 to 2012.

As home values crashed after the housing bust, many property owners thought one consolation would be a corresponding drop in their property taxes. Why that didn’t happen is the subject of a four-day Arizona Republic special report, “Taxation Vexation,” that will publish beginning Sunday.

To prepare you for the series, here’s some background on the property-tax system in Maricopa County.

Question: What government agency determines the home values used to calculate owners’ tax liability?

Arizona’s patchwork of special taxing districts took shape more than three decades ago as local governments looked for ways around property-tax limits without incurring voter wrath.

Today, that system is convoluted, inconsistently regulated and often mystifies taxpayers. Its effects can make or break homeowners, whose property-tax bills often include a one-two punch of levies for local government services and special-district items ranging from street lights to irrigation.

As the owner of two houses in Scottsdale and one in Glendale, Walter Juessen probably knows more than most about real estate in Maricopa County.

Even so, he finds himself surprised by a property-tax system that seems to him at odds with common sense.

Two years ago, Juessen appealed the valuation of his Glendale house after finding that taxes on that property were proportionately higher than in Scottsdale.

In some ways, his experience reflects that of many others who challenge their property valuation in the county: He lost his appeal.

Arizona’s tax burden appears to be easing this year, even as the national tax bill rises, according to a new study.

Arizona’s “tax freedom day” arrived five days earlier this year, on April 5, than it did in 2012, the Tax Foundation reported. The nation’s tax-freedom day comes five days later this year, on April 18, the Tax Foundation reported.

The debate over Maricopa County’s fiscal 2014 budget and property taxes has begun, with the new Board of Supervisors seated and already delving into budget issues.

As those discussions unfold — the new county budget will be adopted in June and the property-tax levy set in August — county supervisors must start to weigh the political consequences of raising the property-tax rate, cutting the county budget or doing a little of both.

I used to be a purist when it comes to property taxation. All property should be on the rolls at its market value. That's the only way to ensure an equitable distribution of the tax burden.

I scoffed at those who wanted to limit the increase in property values, equating that to increases in taxation. Values are just about distributing the burden, I would confidently assert. The size of the burden is determined by spending decisions and property-tax rates. Concentrate on controlling them.

PHOENIX – Voters on Tuesday approved a ballot measure to limit increases in property valuations that determine how much property taxes people pay.

Unofficial returns showed Proposition 117 winning by a wide margin.

The measure, which will take effect in 2015, will place a 5 percent annual limit on how much the assessed value of property can rise. That will shield owners from the kinds of spikes seen during the real estate bubble of the last decade, supporters said.

Arizona has one of the most complex and confusing property-tax systems in the country. We are also subject to rapidly changing property values, which can cause dramatic tax increases for taxpayers and instability in tax revenue for local governments.

Proposition 117 gives Arizona's voters a chance to clean up our property-tax system, making it more fair for taxpayers and more predictable for local governments.

A proposal that seeks to prevent wild swings in property tax bills is encountering a late surge of opposition from tax consultants, who argue it would create inequities among property owners.



Some quarters of the Republican Party are also convinced it won’t do enough to stop tax hikes. And at times, legislative leaders have had to aggressively counter some grassroots activists from directly undercutting the measure.