As counties across the state of Arizona pass their budgets, the Arizona Tax Research Association is pointing out an accounting trick; counties raise their taxes when they hold their tax rates “steady.”
Just last week, the Maricopa County Board of Supervisors bragged that they had kept rates “steady.” They failed to advise the public that “although they could have avoided a tax increase by reducing the tax rates, the BOS made the unanimous decision during their TNT (Truth In Taxation) hearing to raise taxes by keeping rates the same,” according to the Arizona Tax Research Association (ATRA).
From ATRA: Primary property taxes, which fund the maintenance and operations of local government budgets, are subject to TNT. TNT requires taxing entities to notify taxpayers of the intent to increase property taxes over the previous year, exclusive of new construction, by publishing notice in a newspaper of general circulation and holding a public hearing. The TNT law also applies to secondary taxes levied by several county special taxing districts.
In their June 2019 newsletter, Arizona Tax Research Association (ATRA), a statewide taxpayer organization, addressed the plans for a tax increase by Pima County Administrator Chuck Huckelberry:
Pima County claims to be taking a conservative approach this year by reducing its primary tax rate by 7 cents; however, that reduction is not enough to prevent a $6.5 million increase in primary taxes as a result of increased property values. Collectively among the primary tax and its special taxing districts, Pima County is proposing to increase property taxes approximately $11 million.
Pima County Supervisor Ally Miller has offered proposals that would result in a Property Tax Neutral budget. The scenarios she proposed “would preserve pay raises for county employees including the Pima County Sheriff’s deputies and the proposed capital improvement plans for libraries,” according to Miller.
“While reducing the budget by a fraction, we can ensure residents’ taxes do not increase this year,” Miller told constituents in a newsletter.
“As expected, the budget presented by County Administrator Chuck Huckelberry did not cut tax rates enough to avoid increasing property taxes on the cash-strapped residents of Pima County,” continued Miller. “Fortunately for transparency’s sake, we live in a state in which a proposed increase in taxes requires a Truth in Taxation Hearing. Unfortunately, the truth of the matter is that no amount of public input in the past during such meetings prevented the Board from raising your taxes.”
Miller said her proposal was not “onerous,” and that she had “confidence that staff can identify where reductions in the primary operating budget or the Flood District can be made so that there will be a zero increase from last year’s property tax bill.”
The Pima County Board of Supervisors are set to consider Miller’s proposal Tuesday, July 2 at 9:00 a.m.
“Elected officials have the ability to reduce tax rates to avoid tax increases when values rise,” notes ATRA. “However, many reflexively opt to keep the rate the same, advancing a narrative that the establishment of the tax rate is
perfunctory or outside their control. To be clear, when property values grow and tax rates remain unchanged, that translates to a tax increase.”
In May, Pima County Assessor Bill Staples called on the Board to “be honest about the tax rates” and to lower them. According to Staples, the tax roll of Fiscal Year 2020 was expected to top $1 billion.