Pima County Road Plan proposes property tax increase

Plan would provide $100 million over five years for neighborhood street repairs

PIMA COUNTY – Pima County Administrator Chuck Huckelberry has submitted to the Board of Supervisors an amendment to the proposed Fiscal Year 2017/2018 budget that would provide a funding source for Countywide pavement preservation and roadway repairs on neighborhood streets.

The Pavement Preservation, Roadway Surfacing and Repair Plan calls for a 25-cents per $100 of assessed value primary property tax, which would be reserved solely for pavement preservation and road repairs. At 25 cents, the plan would raise more than $19.5 million in Fiscal Year 2018. Huckelberry proposed allowing the tax to remain in place for five years.

The County Administrator proposes the new 25-cent primary property tax be offset by lowering the primary property tax rate. However, for Fiscal Year 2017-2018, the full 25-cent rate can’t be offset due to unavoidable personnel and operations costs in the Sheriff’s Department’s budget, including mandatory payments to the public safety retirement pension fund. The entire 25-cent rate will be offset in years two through five of the plan.

For this year, 11 cents of the 25-cent rate will be offset by lowering the primary property tax 8 cents, the Flood Control District rate 2 cents and the Library District property tax 1 cent.

The Flood Control and Library District property tax rate decreases would end after Fiscal Year 2017/2018. Anticipated growth to the tax base and assessed values would make the plan tax neutral by Fiscal Year 2018/2019.

With the proposed new tax and adjusted rates to the existing primary and secondary taxes, the overall increase to Pima County’s combined tax rate would be 14 cents per $100 of assessed value. At this rate, the owner of the median-valued home in Pima County would pay an additional $18.47 in annual property taxes.

As with all counties and incorporated areas in Arizona, Pima County relies upon the state’s Highway User Revenue Fund (HURF) to pay for transportation infrastructure construction, maintenance and improvements. An 18-cent per gallon tax on gasoline funds the majority of the HURF program. The state Legislature, however, has not changed the HURF gas tax since 1991.

While the gas tax rate has remained static for 26 years, the Legislature has repeatedly diverted HURF dollars to other state budget areas, such as the Department of Public Safety and to balance the state budget. As a result, HURF funding to Pima County fell from a high of $44.5 million in Fiscal Year 2007 to a low of $33.6 million in Fiscal Year 2012.

Since then, HURF funding has increased but not fully recovered. Pima County received $42.5 million in HURF funding in Fiscal Year 2016. While funding levels have begun to recover, Pima County and other jurisdictions still struggle to adequately provide the necessary transportation-related services. Since 1991, the purchasing power of the money received has depreciated 70 percent as a result of inflation and improved vehicle mileage.

“As the Board of Supervisors is aware, every option to increase transportation investment for pavement preservation and road repair has been exhausted, not only this year but in previous years,” Huckelberry wrote in his memo to the Board of Supervisors proposing the plan. “The State gas tax, which stands at 18 cents, has not been raised in 26 years.

Huckelberry also noted: “While we hoped for a more regional or statewide solution to transportation funding shortfalls, it is clear the only option left is to act on our own to raise revenues for pavement preservation and road repair.”

The proposed Pavement Preservation, Roadway Surfacing and Repair Plan augments state support and provides a local funding source to address a local issue. In addition, because the tax would be levied and collected locally, there’s no chance the funding would be diverted to pay for priorities determined by the Legislature.

Since the proposed 25-cent primary property tax would be levied Countywide, the plan calls for funding to be used equitably across Pima County. To ensure the equitability of the pavement preservation program, funds collected through the tax will be shared with the incorporated areas in accordance with each jurisdiction’s assessed value.

For unincorporated Pima County, the funds will be divided among the Supervisorial districts according to the inventory of local road miles in each District.

To determine the funds allocated to the incorporated population, the plan will use the population within a city or town as it corresponds to a Supervisorial District. Funds will be allocated to a city or town according to the percentage of population in each District within that city or town.

Final approval and allocation of funding for local road projects would be done at a public Board of Supervisors meeting. All of the pavement preservation and roadway repair activities would be competitively bid to private contractors.

The Administrator also has recommended $3.5 million of the county’s HURF allotment be allocated for pavement preservation of arterial and collector streets, meaning if approved by the board, the County would spend $23 million on road surface repairs next year.

The Pavement Preservation, Roadway Surfacing and Repair Plan will be presented to the Board of Supervisors for consideration at the scheduled May 23, 2017 meeting.

For more information about the plan, including the full text of the County Administrator’s memo, visit www.pima.gov/roadrepairplan.