Most property taxes leap 15 percent

Arizona Daily Sun
October 3, 2010
Joe Ferguson

Don Overton climbed behind the wheel of various trucks and heavy equipment for decades in order to build a home in Flagstaff and prepare for his retirement with his wife.

Years after his retirement, Overton said he is now preparing get behind the wheel of a snowplow to help pay for a 20 percent increase in his property tax bill.

And he isn't alone.

Many homeowners -- especially retirees on a fixed income -- are trying to figure out how to pay for the tax increases.

Tens of thousands of homeowners in the Flagstaff region were greeted by the blue and white tax bills earlier this week, informing many they would simultaneously receive a tax increase of several hundred dollars while their home value would drop by roughly 10 percent. Tax bills received in the last few weeks reflect valuation notices sent out earlier last year. Those valuations reflect neighborhood real estate market activity as far back as 2008.

With more than three dozen residents sharing their taxes bills with the Arizona Daily Sun, tax paperwork showed most tax bills increasing between 10 percent and 30 percent.

The tax bills will reflect three fairly significant increases: Coconino County's new health services district, FUSD's 15 percent budget override and an unadvertised 15 percent hike in the FUSD primary property tax rate.

DIP INTO SAVINGS

Overton says he could dip into savings, but he is wary about whether he will see more tax increases in the future and whether he will still be able to operate a snow plow later in life.

"I've got $5,000 a month in retirement, but I can see the handwriting on the wall," Overton said.

It isn't his only bill, either, he says. His health insurance for just him and his wife has doubled in the last five years.

With grandkids in the school district, Overton's ire isn't for the school district. It is reserved for the county.

The health district was passed by the county supervisors with little warning, tacking on another $66 to his $1,700 tax bill.

He doubts they would have listened even if he had objected -- he has called county officials for years with suggestions on how to rein in costs.

"They never have returned a call," he said.

CAN'T RAISE RENTS

Across town, numbers dance in Jeff Oravits' head as he examines 12 separate tax bills totaling $24,000 for properties his family owns and leases out.

His office building on Fourth Street is full today, thanks to a 25 percent discount he recently offered tenants. As a result, Oravits says he can't raise the rents he just lowered to cover the 10 percent hike in property taxes if he wants to ensure each suite will be filled. "I can't pass these expenses on to my renters. They are right there," Oravits said, gesturing with his fingers to the gap between keeping the doors open and shutting down for good.

"They can't afford it."

So Oravits said he will probably hold off on planned renovations or hiring another employee in order to pay his property taxes -- including the cumulative increase of about $2,400.

He plans to protest his property valuations next year, conceding he missed his opportunity to complain to the county this year. He hopes that if enough residents complain, officials will be reluctant to raise taxes again in the coming years.

"Many of them are out of touch on what is going on out here," he said.

INCOME FIXED, BUT NOT TAXES

For several years, Bob and Gretchen Smith had been on the county's program that freezes the taxes of those on a fixed income.

But they got caught up with visiting their grandkids and preparing for a high school reunion and forgot to re-register.

By not registering this year, the Smith family saw their taxes increase by several hundred dollars to $1,134 for their home in Sunnyside.

Bob said he was caught off guard by the increase.

"We weren't happy at all," he said. "We thought it was a mistake."

A small pension and their Social Security checks round out their monthly income, Bob said last week he would reapply to get back into the county program.

On a fixed income, he said every dollar counts.

Kenneth Kieft said he will have to dip into his savings after seeing the tax bill on his home in Munds Park increase by more than $300.

A part-time resident, Kieft said he never had a chance to vote for the FUSD override.

He is frustrated by the increases when his property value continues to decline. When he calculated how much he and his wife would need for retirement, he never anticipated double-digit increases in his property tax.

"There has to be an end to this," he said.

LOWER VALUATIONS AGAIN NEXT YEAR

Kevin McCarthy with the Arizona Tax Research Association said steeper declines in property valuations in other parts of the state meant most taxpayers saw smaller tax increases compared to those seen in Flagstaff.

"That has not been the experience statewide," McCarthy said. "The tax rates went up statewide but the aggregate tax levy went down."

Coconino County Treasurer Bonny Lynn did have some good news -- for next year.

She predicted most property valuations -- usually released in February -- will go down significantly.

Overton's main worry, he says, is his ability to afford to continue to pay taxes in the future if the increases continue unabated.

He's also concerned for his neighbors.

"Each of them helped to build Flagstaff," he said.

Some, like Overton, are retired, while others are still working. He worries over whether some can afford the double-digit increase in their property taxes.

"They are pricing us out of Flagstaff," Overton said. "I am lucky I can still work 30 days a year."