Now that ballots have been mailed to vote on the upcoming ballot measures, it may be a good time to review some of the rules and regulations pertaining to this issue.
The two questions that are most likely to be asked are whether there are limits on the amount of property taxation that may be imposed and whether there are limits on bonding by taxing authorities.
LIMITS ON PROPERTY TAX ASSESSMENTS
There seems to be a misconception among the general public that in 2012 Arizona voters, by approving Proposition 117 by a margin of 56.67% to 43.33%, imposed a limit of 5% on the annual increase in the amount of property taxes that taxing authorities are able to impose. In fact, the 5% annual limit under Proposition 117 applies only to the property value, which is only one of the two components that are used to determine the amount of the tax. The other component, the tax rate, is not addressed by Proposition 117. Taxing authorities are free to apply any rate that they wish to come up with the desired tax amount.
In Arizona we have two different sets of property taxes:
Primary or limited property value (LPV). This is the value used to calculate property taxes, and the only value that was limited to a 5% annual growth by Proposition 117.
Secondary or full cash value (FCV). This is the value used to determine the bonding capacity of taxing authorities. It is intended to represent the fair market value of the properties. There are no restrictions on how high it can be and it is not used directly to calculate property taxes.
A simple way to visualize how the property tax assessment works is to consider the following hypothetical scenarios:
| SCENARIO | YEAR | VALUE (LPV) | TAX RATE | TAX AMOUNT |
| A | PREVIOUS | $200,000 | 1.00% | $2,000 |
| B | CURRENT | $210,000 | 1.00% | $2,100 |
| C | CURRENT | $210,000 | 1.43% | $3,000 |
In scenario B we see that the LPV has been increased by the maximum allowable of 5% and is now $210,000. If the tax rate remains at 1.00%, the tax amount is increased by the same 5%, yielding a tax increase of $100.
Scenario C illustrates a situation in which the taxing authority needs the tax amount to be $3,000. They can get there by simply adjusting the tax rate to 1.43%. This is perfectly legal. They can do this without violating the provisions of Proposition 117. Even though Proposition 117 was sold to the voters as a tax-limiting measure, the reality is that it does not do any such thing.
Proposition 117 was placed on the ballot by the Arizona legislature via Senate Concurrent Resolution 1025 (SCR1025).
A summary of this resolution may be read HERE
The full text may be read HERE
LIMITS ON BONDING CAPACITY
To the extent that they exist, limits on the bonding capacity of taxing authorities are determined by applying a percentage to the full cash value (FCV) aggregate for the district involved. These limits are quite generous for two reasons.
First, the percentage to be used is not uniform throughout all taxing entities, and there are many ways to get around them.
Second, the other component of the limit, the FCV, is very difficult to determine and ripe for manipulation. The true market value of any property can be determined accurately only after the property has changed hands from a willing seller to a willing buyer. Lacking that data, the FCV is more or less guessed, based on what comparable properties have done.
To illustrate this, we looked at a major tax entity, the Maricopa County. We obtained information from two sources as follows:
A Google search produced the following:
Debt capacity calculations and limits
The debt capacity is not a fixed number but a dynamic figure tied to the county’s total taxable property value, determined by the last completed assessment.
Standard GO bond limit: The Arizona Constitution mandates that a county’s total general obligation bond debt cannot exceed 6% of its taxable property value. All GO bonds must be approved by voters.
Voter-approved expansion: With voter approval, a county’s general obligation bond indebtedness can be increased up to 15% of the taxable property value.
Non-GO bonds: The county can issue certain types of non-general obligation bonds without voter approval, also up to 6% of the taxable property.
Key financial figures
Several recent financial figures are relevant to Maricopa County’s debt capacity:
Total full cash value: As of 2024, the Maricopa County Assessor’s Office reports that it administers over 1.8 million parcels and accounts with a full cash value of more than $1 trillion.
No outstanding GO debt: The county maintains a AAA bond rating and reported in March and September 2025 that it carries no outstanding general obligation debt. This means that Maricopa County has its full debt capacity available, provided the borrowing is approved by voters.
Example capacity calculation
To estimate the county’s potential general obligation debt capacity, you can use the total full cash value reported by the Assessor’s office as a baseline.
Full capacity with voter approval:
$1 trillion (Full Cash Value) x 15% = $150 billion
Capacity without voter approval (non-GO):
$1 trillion (Full Cash Value) x 6% = $60 billion
It is important to note that these are maximum limits. The specific amount of debt the county can issue at any time depends on the latest assessed value and voter approval. The county’s fiscal responsibility and strong financial management have allowed it to maintain its AAA credit rating while carrying no GO debt.
Additional information may be obtained by reading the Maricopa County Debt Management Plan.
The conclusion we can draw from all this is that even though there are constitutional and statutory restrictions in place, effectively those restrictions do not limit how much property tax may be levied or how much debt may be incurred.
The only effective limits are those imposed by voters via their up or down votes on ballot measures.
When restrictions on bonding are applicable, taxing authorities tend to seek bonding up to the maximum allowed. That is why we often see bonding proposals that far exceed the reasonable and customary cost of the project that the bond issue is intended to fund. Since these bond issues are so profitable for all parties involved, there is never a shortage of bond issue proposals. If the voters vote down one project, it is very likely that a new project will be proposed. Because of this, voters should read the text of propositions very carefully and vote according to the merits of the projects.
We are screwed…. again…