Stick 'Em Up!

County Supes Consider Hiking The Already Sky-High Property Tax Rate.

By Chris Limberis

TO HAVE ENOUGH money to operate next year, Pima County officials, flailing against a $45 million debt, say they must raise taxes--either by creating a first-ever sales tax or by piling more property taxes on what's already the highest rate of Arizona's 15 counties.

Currents The proposed sales tax, at a half-cent per dollar, would raise between $44 and $48 million a year before growing in subsequent years, but it's a fading dream for County Administrator Chuck Huckelberry and four of his bosses on the Board of Supervisors

It's his fifth boss, Republican Ray Carroll, who's stopping that revenue dream. Carroll is exercising a veto contained in the 1990 legislation that gave Pima County the authority to levy a half-cent tax with a unanimous vote of the Board of Supervisors.

Attempts by the sales tax proponents, including Carroll's colleagues, Huckelberry, County Attorney Barbara LaWall and Sheriff Clarence Dupnik, to override Carroll by changing the law to allow passage with the votes of four supervisors is going nowhere in the Legislature.

Huckelberry is losing his fifth battle to impose a sales tax. Three have been doused by voters. In 1986 and 1990, voters killed a half-cent sales tax to pay for transportation improvements by 57 percent to 43, and 61 percent to 39, respectively. Voters then trounced a quarter-cent sales tax for jail and juvenile detention expansion in 1994 by 70 percent to 30 percent.

So Huckelberry is resurrecting a property tax scheme left dormant since it was introduced four years ago by Democratic Supervisor Dan Eckstrom: jack up county property tax rates so high that the bulk of the increase must be paid not directly by homeowners but out of existing state funds.

Cheated by the state's tax distribution formulas for years, Pima County can use quirky state laws to cover the cost of a 35 percent increase in county property tax rates for homeowners within the boundaries of the Tucson Unified School District.

But the scheme will work for homeowners in TUSD, which has nearly 50 percent of the homes in Pima County--and only two of the county's 15 other school districts. The other drawback for already timid supervisors is that all other properties, including commercial, business, vacant and rentals, would not get any of the state benefit and instead would be stuck with the entire increase.

A fiscal conservative, Eckstrom wasn't simply trying to raise taxes in 1995. Well before the county's deficit spending grew, Eckstrom sought to shift secondary taxes, such as for flood control, to the primary tax rates in order to take advantage of state law and give homeowners a tax break.

In Arizona's complicated property tax system, there are two basic divisions. Primary taxes, which are calculated with a percentage of a property's limited value, are for general operating expenses. Secondary taxes, calculated with a property's full cash value, cover voter-approved debt as well as special purposes and districts such as the county's Flood Control and Library districts.

Homeowners face primary tax rates from the county, school districts, Pima Community College, state education assistance and the city. Property tax rates are calculated for each $100 of a property's value then multiplied by the ratio assigned to Arizona's 12 classes of property. Residential property is at 10 percent.

Here's the basis for the trick that Eckstrom proposed in 1995 and that Huckelberry is now floating:

  • The combined primary tax rate cannot exceed $10. For homeowners in TUSD and the City of Tucson, that rate is $10.08 per $100. But even that seemingly simple addition takes a circuitous, obscure, but necessary route. TUSD's primary rate is $7.08. Tax rollbacks that followed California's Proposition 13 in the late 1970s gave a rebate to homeowners that is now at 35 percent of school district primary rates. So TUSD's primary rate, for the homeowner, is $4.60. Add the current county primary rate of $3.68; Pima Community College's $1.13; state education assistance of 53 cents; and the city's 14 cents, and the combined net rate is $10.08.

  • In real terms, that's a tax bill of $1,008 for the owner of a $100,000 home. But the state cap limits the rate to $10, so the TUSD homeowner pays $1,000, with the remaining $8 paid by the state. The proposed county increase of $1.30 per $100 would normally mean an extra $130. But that amount also would be absorbed by the state. The hugely diluted taxes would come to Tucson from Phoenix, Flagstaff, Kingman, Yuma--every taxpayer in Arizona.

  • For homeowners within TUSD but outside the city, the combined tax rate is about $9.95. That means homeowners would pay only $5 of the proposed county increase.

With no financial crisis in 1995, Eckstrom sought to stick it to the state by shifting secondary taxes, such as flood control taxes, to the primary rate. The move would have relieved taxpayers of 20 cents of flood control taxes--$20 for the owner of a $100,000 home.

He got no takers, primarily because only one other supervisor, Republican rival Ed Moore, understood taxation and what Eckstrom's plan would do.

"No one wanted to do it," Eckstrom says. "I realize that it probably wouldn't have lasted long. The Legislature would change the law. I don't like taxes any more than the next guy, but it's time for us to diversify our tax base."

Now the issue has conveniently arrived while Carroll is trying to fight off Huckelberry, fellow supervisors, the County Attorney, the Sheriff and the two daily papers, while choking the sales tax.

Carroll will be forced to look twice. Huckelberry and other proponents have said that 17 percent of the sales tax would be paid by visitors. While TUSD spreads across all supervisorial districts, the clincher for Carroll to vote against this scheme may be the small Contintental Elementary School District near Green Valley. Homeowners would have to pay the entire $1.30--a $130 increase for the owner of a $100,000 home and a $104 increase for the owner of an $80,000 home.

Tax bills, using existing tax rates for schools with a $1.30 county increase, would mean an extra $4 for a TUSD home on the tax rolls for $80,000 and outside the city. Other increases include $104 in Ajo, Catalina Foothills, Marana, Tanque Verde, Redington, Sahuarita, San Fernando, Vail, and Flowing Wells and Amphitheater outside the city. The increase for Flowing Wells in the city would be $98.40 and for an Amphi home in the city, $102.40. In Sunnyside outside the city, the increase would be $99, while for a Sunnyside home in the city the increase would be $88. The increase would mean an additional $55 on an $80,000 home in the Indian Oasis School District, nearly $76 more on an $80,000 home in the Empire Elementary School District and $72 in the Altar Valley Elementary School District. TW

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