Death And Taxes

Props 104 And 105 Would Benefit The Old And The Dead.

TAXES AND DEATH aren't the only certainties in life; add election-year political pandering to senior citizens. After all, as a group the oldsters vote in extraordinarily high percentages. So why shouldn't politicians ignore children and other non-voters while groveling for favor, and votes, from the over-65 set?

To some observers, Proposition 104 fits that bill. To others it is much-needed relief from the ravages of constantly rising property taxes for low- and moderate-income seniors.

Under the provisions of 104, homeowners 65 and older who have annual incomes less than $24,500 for an individual or $30,700 for a couple can apply to freeze their property's county-assessed valuation. According to Litchfield Park state Rep. Jerry Overton, one of those who sponsored putting the measure before the voters, "For the past three years, Bill McGibbon from Green Valley and I tried to freeze property valuations for everyone until the home was sold. But we were thwarted by the tax collectors, who have unfairly increased taxes without need. So we proposed this measure to protect elderly people on fixed incomes to keep them from being driven out of their homes."

The proposition obviously had a lot of political support in the state legislature. The final vote to place it on the ballot was 29 to 1 in the Senate. House members, however, were a little more dispassionate, approving it by a 36-to-20 margin.

While Prop 104 may look good to the politicians in Phoenix, Pima County Assessor Rick Lyons has a different view. "The legislature has spent the last 20 years moving the property tax base from commercial and industrial property to homeowners. Another tax revolt may be brewing, so to divert attention they focus on valuations. They don't believe in helping senior citizens," Lyons claims, "because if they did, they could use a full or partial property tax exemption instead of freezing valuation. That is an approach used throughout the country and I support it.

"So why is this freeze being done?" Lyons asks. "This proposition is being used as a smokescreen to keep people's focus on property valuation. It is easy to sell the idea that property taxes go up because of increased values, but that's not correct. They don't want people to understand that property taxes on commercial and industrial properties have gone way down and there has been a shift to homeowners."

Responding to Lyons' claim that a property tax exemption would offer a greater benefit to affected senior citizens, Overton offers a political explanation for the provisions of Prop 104: "We thought we could get this one through the legislature," he says, referring to opposition to his earlier proposal to freeze all residential valuations.

Overton calls Lyons' comment about the motives behind the proposition the "biggest smokescreen in the world" and says the Pima County Assessor's response is "a typical bureaucratic answer. Tax collectors are only interested in more money, more power and more ways to spend money. There is an unholy alliance between county supervisors and tax assessors. The supervisors tell them how much money they need, then the assessors increase valuations to raise it."

The actual method of determining property taxes, of course, is somewhat more complex than that. After a taxing agency such as a school board, a city council or a county board of supervisors determines how much property-tax money they need to operate, a tax rate is set based on the total market-based valuation of property within the affected area. So the final property tax bill is a function of all three factors: budget, valuation and tax rate.

Prop 104, if adopted, would allow qualified senior citizens to freeze their homes' valuation. That would mean that all other property tax bills would have to rise somewhat to make up the budgetary difference lost because of the freeze.

The proposition, however, won't offer much of a savings to participating seniors. Under the provisions of 104, over the past five years the owners of a modest midtown home would have seen a tax reduction of approximately $842, or $168 a year. Not much for someone in desperate financial need.

Arizona senior citizens presently have what might be a financially much more attractive option concerning property taxes. They can apply to defer their payments until the house is sold or until they die. According to Lyons, however, no one in Pima County has applied for a deferment in the three years it has been available.

Marian Lupu of the Pima Council on Aging wasn't aware of the property tax deferment program. She did say that she personally supports Prop 104 because there are some senior citizens who have difficulty in paying their property taxes and passage of 104 will help a limited number of them.

WHILE THOSE WHO would benefit from the provisions of 104 are moving toward their eternal reward, Proposition 105 addresses taxpayers who have already passed on. On its face the measure might appear simply to exempt the collection of property taxes for graves, but like everything political these days, there is a little more to it than that.

According to Bill Addison, president of Evergreen Cemetery, a law has been on the books since statehood exempting cemeteries from paying property tax. But a few years ago someone discovered that no state constitutional authority existed for the exemption. That is why Prop 105 was placed on the ballot and why the legislature has already overwhelmingly adopted a law implementing the measure should Prop 105 be approved by the voters.

Supporters of 105 have campaign signs that read, "Don't Tax Graves." Assessor Lyons calls the slogan misleading, saying that no gravesite in Pima County is now taxed or will be in the future, no matter what happens on 105.

Instead, he says, the issue is: Should a property tax exemption be provided to a for-profit business to cover its vacant, yet-to-be-developed land on which a tax is now paid? Gravesites, Lyons says, wouldn't be taxed, but vacant cemetery property awaiting development would be if the measure fails. If 105 passes, the vacant land will be exempt from property taxes.

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