Pima County Bond Will Cost $1,512,766,652 More Than A Latte

The majority on the Pima County Board of Supervisors repeats the mantra that the cost of the new bonds to residents is little more than the cost of a latte. They ignore the hit commercial property owners will take and want the public to ignore the upward trajectory of Projected Tax Rate per $100 Taxable Net Assessed Value.

Commercial property owners are painfully aware of the hit they are about to take on two levels; one being the increase in taxes, and two being competition with the County for renters as the County develops more commercial buildings for various “economic development” items in the proposed bond package.

Related article: Pima County Administrator Claims Verifying Elections Is A Crime

Residents, however do not follow the money as closely as those in the business of making money through commercial properties. As a result, they may not be aware of the all the facts. Residents are told in the voters’ pamphlet that they will pay $0.3938 per $100 of taxable net assessed value over the life of the bond and $.70 per $100 of taxable net assessed value the first year. The fact is – they will pay $.70 in the first year and then it climbs.

The tax rate climbs on a home valued at $120,693 is 0.0974 in 2016-217 and grows from there and in 2023-2024 it will be 0.5462 per $100 of taxable net assessed value.

Home values will likely climb as well, resulting in much more than the cost of a mere latte.

yearly-tax-rate-pima-bonds

The debt retirement schedule in Table 2 below is only an estimate and relies on a number of assumptions.

  • The schedule assumes that the taxable net assessed value of real property in Pima County will increase as prescribed in Arizona Revised Statutes § 35-454 (see column 2).  3.5% increase for 1st five (5) years and .7% thereafter,
  • The general obligation bonds issued for the propositions will be sold according to the schedule shown in Table 1,
  • That all bonds to be sold will have a 15-year final maturity, except for the $160,000,000 sold for road repair and pavement preservation, which will have a 10-year final maturity;that all bonds sold will carry an interest rate between 2.78 percent and 3.45 percent per year,
  • The remaining $25,681,000 of debt authorized in previous elections is sold,
  • There are no future voter-approved bond elections after 2015.

Totals excluded from the County’s schedule were total interest for each bond  $84,058,430 and $203,332,227 as well as the total debt service for both bonds is $1,512,766,657.

To write it on a check would be  One Billion, Five Hundred Twelve Million, Seven Hundred Sixty Six Thousand, Six Hundred Fifty Seven Dollars, and 0/100 cents.

Estimated Debt Retirement Schedule & Secondary Property Tax Rates

Table 2 Pima County Debt Retirement Schedule and Estimated Tax Rate Current and Proposed General Obligation Bonds

All Seven Propositions Combined
Estimated Debt Retirement Schedule For Current Bonds Outstanding and Anticipated Future Sales 2 Estimated Debt Retirement Schedule For the 2015 Proposed Bond Authorization Total Estimated Debt Retirement Schedule for Current and 2015 Proposed Bond Authorization
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7 Column 8 Column 9 Column 10
Fiscal Year Projected Taxable Net Assessed Value 1 Principal Interest Projected Tax Rate per $100 Taxable Net Assessed Value 2 Principal Interest Projected Tax Rate per $100 Taxable Net Assessed Value 3 Total Debt Service Projected Tax Rate per $100 Taxable Net Assessed Value
2015-16 7,620,361,635 39,315,000 14,235,429 0.7000   53,550,429 0.7000
2016-17 7,886,822,820 43,285,000 13,307,145 0.7176 6,781,819 903,500 0.0974 64,277,464 0.8150
2017-18 8,162,601,354 45,792,500 12,038,068 0.7085 6,174,271 2,521,965 0.1065 66,526,804 0.8150
2018-19 8,448,023,035 44,115,000 10,458,799 0.6460 10,119,754 4,157,321 0.1690 68,850,874 0.8150
2019-20 8,743,425,057 46,092,500 8,944,795 0.6295 10,469,322 5,752,492 0.1855 71,259,109 0.8150
2020-21 9,049,156,401 41,540,000 7,343,158 0.5402 17,458,280 7,407,444 0.2748 73,748,882 0.8150
2021-22 9,112,437,152 42,877,500 5,801,714 0.5342 16,731,184 8,855,104 0.2808 74,265,502 0.8150
2022-23 9,176,160,425 31,125,000 4,121,976 0.3841 29,148,774 10,389,977 0.4309 74,785,728 0.8150
2023-24 9,240,329,314 21,955,000 2,883,755 0.2688 38,747,391 11,722,841 0.5462 75,308,988 0.8150
2024-25 9,304,946,937 14,800,000 2,033,014 0.1809 46,152,074 12,850,664 0.6341 75,835,752 0.8150
2025-26 9,370,016,431 15,397,500 1,427,278 0.1795 45,789,763 13,753,036 0.6355 76,367,578 0.8150
2026-27 9,435,540,956 11,125,000 790,703 0.1263 50,021,665 14,962,185 0.6887 76,899,553 0.8150
2027-28 9,501,523,694 7,152,500 403,076 0.0795 53,889,586 15,992,143 0.7355 77,437,304 0.8150
2028-29 9,567,967,849 2,220,000 142,376 0.0247 60,175,162 15,441,074 0.7903 77,978,613 0.8150
2029-30 9,634,876,648 1,516,000 78,493 0.0165 54,583,974 13,609,296 0.7078 69,787,764 0.7243
2030-31 9,702,253,341 865,000 36,349 0.0093 43,717,694 11,932,953 0.5736 56,551,996 0.5829
2031-32 9,770,101,198 442,500 12,302 0.0047 41,717,694 10,558,693 0.5351 52,731,188 0.5398
2032-33 9,838,423,516 41,595,699 9,240,032 0.5167 50,835,731 0.5167
2033-34 9,907,223,612 39,575,356 7,924,763 0.4794 47,500,119 0.4794
2034-35 9,976,504,826 37,221,689 6,665,660 0.4399 43,887,349 0.4399
2035-36 10,046,270,525 34,555,027 5,471,989 0.3984 40,027,016 0.3984
2036-37 10,116,524,094 32,051,027 4,352,450 0.3598 36,403,477 0.3598
2037-38 10,187,268,947 28,051,032 3,302,523 0.3078 31,353,555 0.3078
2038-39 10,258,508,519 23,717,689 2,380,596 0.2544 26,098,285 0.2544
2039-40 10,330,246,269 19,051,022 1,597,336 0.1999 20,648,358 0.1999
2040-41 10,402,485,681 14,384,355 963,409 0.1475 15,347,764 0.1475
2041-42 10,475,230,264 9,705,855 478,815 0.0972 10,184,670 0.0972
2042-43 10,548,483,549 4,172,842 143,963 0.0409 4,316,805 0.0409
Total 409,616,000  84,058,430 815,760,000 203,332,227  1,512,766,657

Table 2 shows the estimated schedule for retiring previously authorized general obligation bonds of Pima County including all previously sold and remaining authorized but unsold debt (see columns 3 and 4); the estimated schedule for retiring the new general obligation bonds for all seven propositions, assuming they are authorized and then sold in accordance with the estimated sale schedule (see columns 6 and 7); and the total estimated aggregate debt service for both existing and new bonds (see column 9). Table 2 also shows the projected secondary property tax rates that would be required to finance this debt retirement schedule (see column 5, 8, and 10).

Related articles:

Prop. 426 Could Be Pima County Debt Accelerator

Pima County Bond Beneficiaries Concerned With Funding Timeline

Tucson Medical Center Funding “Yes on Pima County Bonds”

Pima County Bond Election – Proposition 430

Pima Bonds Campaign Funders:  Donors Or Investors?

Arizona Supreme Court Rejects Pima County Lawsuit, Huckelberry Demands Tax Increase

About ADI Staff Reporter 16186 Articles
Under the leadership of Editor-in -Chief Huey Freeman, our team of staff reporters bring accurate,timely, and complete news coverage.