Pima County Sues Over New Arizona Property Tax Law

Monday, June 8, 2015
Will Stone

Pima County is asking the Arizona Supreme Court to excuse it from a new state law that would cost it millions of dollars.

In 1980, Arizona limited how much residential property owners could pay in primary property taxes to no more than 1 percent of the cash value. The reason was to protect people who live in multiple taxing districts from paying too much. Until now, the state would cover that amount over 1 percent of the limit.

But this year, the Legislature decided no more and began asking the counties to pay.

As a result, Pima could be saddled with $18 million in new costs, forcing it to find that money elsewhere, including raising taxes for the whole county

Michael Rossi, a lobbyist for Pima County, said Tucson Unified School District is one example of where this cap is exceeded.

“Residential taxpayers inside will not pay anything, but it’s the residential taxpayers outside the 1-percent limit that end up having to pick up the burden for others, and we think that violates uniformity and equal protection,” said Rossi.

But some tax policy experts disagree and said counties should be the ones paying because it creates more accountability.

“Now that they have to impose the higher taxes on themselves to pay for the 1-percent tax, for once we have some connection between the taxes and the elected officials who are now on the hook for imposing those higher taxes,” said Kevin McCarthy, head of Arizona Tax Research Association.

The law could impact other county budgets in the future, too.