Just as we thought the housing market was in recovery, Pima County Administrator's new fiscal budget proposal sees things differently. Tucson Association of Realtor’s March report stated the average home sales price of $200,479 was $3,898 higher than in February ($196,581); and about 4.5 percent higher than a year ago, that of $191,881 in March 2013 in Pima County.
Pima County is collecting far less in overall property taxes from businesses and homeowners, that’s why they raised the tax rate last year and ended the year with a surplus of approximately $9.64 million.
The County’s property tax levy (pre-recession) was a high of $422 million. Comparatively, the County expects to collect only $382 million through the closing of this fiscal year – that’s $40 million, or about 10 percent, less! But found there was a $9.64 million surplus.
A 28-cent increase in the primary property tax rate is recommended for Pima County by the County Administrator. This would bring the primary tax rate to $3.94 per $100 of assessed value, a mere 7.65% increase from the current $3.66 per $100 of assessed value that was raised 7.3% last year.
This tax increase represents an increase of approximately $20 million to the County and restores about half of the amount reduced revenues from loss of businesses since 2009; this in spite of the available ending balance for FY 2013/14 of $32.47 million, an extra $9.64 million over budget General Fund Reserve of $22.8 million.
“The recommended budget for the fiscal year starting July 2014 should respond to critical public service needs,” said Pima County Administrator Chuck Huckelberry.
Huckelberry noted that criminal justice needs are incurring unavoidable higher costs and remain the primary driver of the County budget, consuming 52 percent of the general fund. In fact, just four mandated services – law enforcement, courts, prosecution and indigent health costs related to criminal justice – consume more than the entire primary property tax levy of $277 million.
Okay but, all of Public Service in Maricopa’s $2.2 Billion budget accounts for but 51% of its county’s budget, and they were able to lower taxes last year when we raised ours 7.3% last year.
But wait, it’s not finished. A secondary tax rate is also recommended (by the County Administrator) to increase the Library District by 6 cents (to $0.44) and the Flood Control District by 4 cents (to $0.30).
The total combined, County property tax rate increase is $5.4 million, a 29.87 percent increase from the current year and the resulting combined County levy is $403 million, a $20 million increase from the current year.
According to Huckelberry, “We’ve been prudent. We’ve tightened our belt. But we can’t continue to starve our core services. Although taxes aren’t popular, that’s how we pay for responding to burglary calls, monitoring air quality, providing job training, and maintaining parks for our kids to play in.”
Does this mean we should expect 7.65% more burglary calls, 7.65% more monitoring of air quality (actually this is one thing better than Maricopa) job training and parks maintenance FOR THE KIDS! Is there anyone who doesn’t understand yet what politicians mean when they say, “It’s for the Kids”?
It would be reasonable to ask how it is possible to increase the primary and secondary tax rate and still have a recommended $1.1 billion budget (half of Maricopa County) that’s $93 million lower than the existing one.
Huckelberry explains it this way: “Among the factors: a reduction in costs in the wastewater department, savings from the privatization of solid waste management, reductions in capital projects and an overall decrease in debt service.”
The budget also recommends nine decision packages for consideration by the Board of Supervisors that would add an additional 33 cents to the combined property tax rate. The packages meet needs in such areas as law enforcement, indigent defense, information technology, wildcat dump enforcement and road repair.
And include:
- $2.6 million for Sheriff Dupnik’s Office.
- $1.8 million for Indigent Defense to adjust the budget for contract indigent defense attorney’s to reflect the historical trend of actual expenditures for this service.
- $2.2 million to afford base General Fund support to the District until the Stadium is paid off in 2018.
- $6.1 million to fund a one-time capital and ongoing maintenance costs necessary to keep the existing information system functioning.
- $1.3 million to fund utilities and maintenance for the newly constructed Public Service Center for one-half year and the newly acquired Apache Park Warehouse for a full-year.
- $245,515 to fund wildcat dump enforcement.
- $5 million for road repairs to continue for a third year the subsidy to supplement special revenues to road construction and maintenance.
- $6 million countywide for a 2 percent or $750, whichever is greater increase to employee compensation.
(Editor's note: There seems to be some budgetary duplication of services here, the primary tax being raised was for public services but yet these items are proposed again separately, isn’t the $2.6 million for the Sheriff’s Office a "public service" item? But I won’t dwell on that now, I’m much more interested in finding out why the County’s tax base is going to decline.)
If approved in its entirety, the nine decision packages recommended for consideration by the Board would add 33.27 cents tagged to the combined County property tax rate and $25 million to the combined County levy.
But don’t worry, these increases will largely be offset by a recommended 8-cent reduction to $0.70 in the Debt Service tax levy, according to County Administer Huckelberry.
So now instead of $3.94 per $100 assessed value, we’re actually talking about an increase to $4.27 per $100 assessed value if all these are approved by the County Board of Supervisors, sounds like that would be a 16.66% increase from the current $3.66 per $100 assessed value, if everything passes, and why wouldn't it pass? There is no opposition to these increases, unless it were to come from the taxpayers of Pima County.
The above tax increases are based upon an assumption by the County Administrator that the continuation of the current primary tax rate of $3.66 would decrease next year’s revenues by 1.2%. Is this to say property valuations are expected to decrease?
Well yes as matter of fact, the value of the net primary property tax base is projected in the proposed budget to decrease 0.54 percent according to the budget proposal, no reasons given as to why. Wouldn’t it be nice to know what our County Administrator knows? Total primary property tax revenues from all sources are projected to decrease $4.2 million next year if we keep the same tax rate.
A budget hearing is scheduled for May 20, when the Board will set an upper “ceiling” for the budget, which caps the total budget allocation as well as the proposed property tax levy. Final budget adoption is scheduled for June 17.
Review the full budget proposal HERE
For related article see Taxationa Vexation: Pima vs. Maricopa