Why is Pima County's tax rate nearly three times Maricopa's?

Arizona Daily Star
Monday, August 22, 2011
Rhonda Bodfield

Pima County residents pay a primary property tax rate that's nearly three times that of taxpayers living in Maricopa County.

It's a comparison that has long attracted notice, particularly for folks in Phoenix who like to hold it up as an example of Southern Arizona's out-of-control spending.

Deciding whether the difference is out of whack, however, requires making sure there aren't some oranges mixed in with the apples.

Pima County taxpayers in fiscal year 2012 will pay a primary tax rate of $3.41 per $100 of assessed valuation.

Maricopa County taxpayers will pay $1.24.

Kevin McCarthy, the president of the fiscally conservative and business-oriented Arizona Tax Research Association, was part of a working committee cobbled together by Gov. Fife Symington, back in the 1990s, to ferret out the difference.

Ultimately, he recalled, the group identified a host of reasons, but essentially concluded one primary thing: "Historically, it's just been the case that Pima County spends more."

That's the kind of talk that gets County Administrator Chuck Huckelberry agitated.

"That's the historic misconception," he said. "Because the board majority has been Democrats, there's this impression that they're a bunch of ultraliberals. That is a misinformed, stereotypical Maricopa County reaction."

values and taxes

Huckelberry said there are good reasons that Pima's primary tax rate is higher.

First of all, he notes, Maricopa has higher property values. Take into account its corporate headquarters and major utilities, such as the Palo Verde Nuclear Power plant, and it's higher by a tune of about 19 percent overall.

Maricopa County also has a separate jail tax, while Pima County doesn't, forcing those expenses onto the primary rate.

Maricopa County pays for its indigent health-care costs on the secondary property tax. Pima, meanwhile, is spending $15 million this year for UA Healthcare, which took over operation of the county's former Kino hospital. That, too, is supported by the primary rate.

He also notes that while 94 percent of Maricopa County residents live in an incorporated city or town, that number is only 64 percent in Pima County. And while critics will say a county generally has a fixed set of things it must do, regardless of how many people live in it, Huckelberry said it's indisputable that the large number of people outside of cities triggers higher costs for law enforcement and parks, for example.

Pima County is also the only one of the 15 that has no sales tax.

By the time all that subtraction is done, Huckelberry said the tax rates are far more comparable, saying the rates would have translated into a $1.57 tax rate for Pima County compared with a tax rate of $1.24 for the larger county.

Joe Higgins, a former supervisor candidate who has a morning radio talk show, questions whether Pima County taxpayers are really getting that much more than Maricopa's, given the difference. He said he's not convinced the county is as lean as Huckelberry says.

Even using Huckelberry's math comparing the two county tax rates, he notes, the county is still spending some 26 percent more. He said the bureaucracy is too big, and the county is doing too much.

"They can dump data on you to death, but the fact remains the tax rate is far higher," he said.

The money pot

The levy - essentially the pot of money taxes bring in - has also swelled.

In 2002, the county collected about $257 million.

For this fiscal year, the levy is expected to be about $402 million.

That's about a 57 percent increase - even though the population growth over that time hovers at about 12 percent, nudging up from about 850,000 residents to roughly 1 million, according to census figures.

Huckelberry, not surprisingly, trots out more math.

The county inherited the library system from the city, he notes, and voters authorized bonds over that time as well. By the time those new responsibilities are removed, he said, the levy increase is really only 38 percent. Factor in the population growth and inflation costs, and the levy isn't out of whack, he said.

Much of the county's spending is funneled to law enforcement and criminal justice. Of the $94 million in growth on the primary levy, law enforcement and criminal justice expanded by $79 million. If you then factor out state-costs shifts and health-care payments, he argues that despite what seems a gargantuan number, the levy is actually less than it was in previous years.

The Deal

So is he arguing county taxpayers are getting a good deal?

"I'm arguing that they're not getting as bad a deal as they think and that they have to compare apples and apples when they make these comparisons."

Both Higgins and the association's McCarthy maintain the county's large number of unincorporated residents is self-inflicted, since the county didn't enthusiastically embrace some incorporation efforts in the 1990s. Most recently, county officials have raised questions about a possible city of Tucson annexation at East River and North Craycroft roads, where a boutique hotel could be in the works.

Republican Supervisor Ray Carroll said he isn't buying Huckelberry's math either. "I think it just comes down to the fact that Pima County is a top-heavy, large government that has fiefdoms to protect - and it has the tax rate to go along with them."