What the Devil won't tell you
Nice try governor, but #RedForED deseg switcheroo won't fly
Teacher raise plan includes illegal tax hike on Tucson
Nice try, governor, but you are about to get spanked by the Arizona Supreme Court.
Gov. Doug Ducey unveiled his plan to find more money for teachers in the state budget, and it includes a patently illegal swat at Pima County. It's not even close.
You may have read about how it unfairly targets Tucson, which it does. It's just never going to happen because it's unconstitutional.
Ducey is trying for the second time in three years to get around a constitutional provision requiring a two-thirds vote to raise taxes. Courts shot down a sneakier attempt in 2015 and this one doesn't even try to be shifty.
Ok, patently declaring a court will never do X is silly. But it's almost certain Ducey's extra-judicial move will be squashed like a grape.
This isn't being pulled over for driving with an open container of alcohol and screwing the cap back on. This is being pulled over for an open container of alcohol and telling the cop to hold your beer while you sign the ticket.
It is kinda funny, insomuch as accounting can be funny.
I'm going to start, though, by telling you straight up that I'm condensing a whole bunch of drama and detail to tell the following story. Understanding the wide view illustrates why this is a real easy "hell no." It's as if I typed "Tyrion is hand to the mother of Dragons"—it would make no sense unless you know Shay, Bronn, the Battle of the Blackwater, and how a mountain-sized killer decapitates some SOB rather than going all "Indigo Montoya" on his ass.
So if I tell you: Ducey wants to move school district desegregation funding from the primary property tax to the secondary property tax, it means nothing to you, dear reader, because you would rather have a life than the following knowledge in your head. That's what you have me for. You won't say "aw, no he didn't! uh-uh!" until you read a tale, a tale of a fateful tax.
The story behind the S.S. Minnow
We have to take the wayback machine to the early 1980s, to a mystical time when Arizona was trying not to act as crazy wingnut as California. Our coastal neighbors had just passed a cap on property taxes known as Prop. 13. Back then kids, Republicans road-tested ideas in California before taking them national; Prop. 13 and Ronald Reagan being two of them.
Arizona saw Prop. 13 pass and wigged. Sure enough, the Reagan Revolutionaries began talking up that proposition here. The state's reasonable Republican Establishment (think Sandra Day O'Connor and guys like Burton Barr), decided to come up with their own less strident version of the limit on property tax hikes. In general, no homeowner can pay more than 1 percent of the value of their casa in property taxes. It's like tossing a hot dog at a charging pit bull hoping to distract the pooch before it takes a bite out of your thigh.
The Legislature cobbled together a watered-down version based on all sorts of math and exceptions and that became the law of the desert. One problem. The state was rejiggering its school funding formula at the same time and Prop. 13 Lite didn't work because it would just increase local taxes or force big budget cuts. The Legislature, not being a bunch of ideologues eager to strangle public schools of cash, said: "Whoops! Our bad! Don't worry about it. We'll make up the difference in school funding and cut y'all a check out of our end."
All that stuff became the law we live by today.
Now, I interrupt the story to explain how tax bills work.
There's a primary tax levy that pays for government's day-to-day operations and then a secondary property tax levy, that mostly pays off bonds approved by voters.
The primary tax levy is capped at that 1 percent level. You will read or hear about a 10 percent cap and that's fine. It's the same thing. The "10 percent" figure is how bureaucrats discuss the end result of all the calculations that take a property's assessed value and wind up with a tax bill. On residential property it works out to 1 percent.
But ... how do you get to that limit?
No single government controls the size of your primary property tax rate, right? The city sets its rate. The county sets its rate. School districts set their rates. The community colleges set their rates. And then there are all the secondary assessments, including water districts, fire districts, on and on. The jurisdictions don't always check in with each other. The county can cut its rate a nickel and a property owner won't feel it if the school district increases its rate by a dime.
One more important bit of info. Your particular tax bill is mostly determined by the school district in which you live. That's because every city resident also lives in the county and the community college district and pay the same tax rates as every other city resident. Bills vary mostly because of the school district.
If that total bill exceeds 1 percent of a home's value determined by the county, then the state of Arizona kicks in the difference.
Back to our story ...
I can feel through the keyboard reading this thinking: "Wait! Doesn't that mean that once the tax rate exceeds 1 percent and the state is on the hook, can't local politicos just jack up the primary tax rate and stick the Legislature with the bill?" Not completely but sort of, yes.
There are spending limits in placed on school districts and the Tucson City Charter limits the size of the property tax. The limit does not apply to other kinds of property, like businesses. So business is on the hook for those tax hikes.
Still, most Joe Six Packs won't notice a primary property tax hike once it exceeds 1 percent. The political impact gets muted.
Well, doesn't that piss off the tax-a-phobic, raze-the-budget Legislature, which has to cut checks to the cover high taxing (Democratic) school districts?
Immensely. They hate this with the heat of 1,000 suns.
So why doesn't this Tea Partying Legislature finally end the gravy train?
Caught in their own net
It was possible before 1992, but it's not now and tax-a-phobes only have themselves to blame.
In 1992, red-blooded conservatives mwahahahed their way to placing a ballot question before voters that would require a two-thirds supermajority vote in both houses of the Legislature to raise taxes. They failed to provide a carve out for the 1 percent arrangement.
Remember, your tax liability didn't go away. The state is just paying it for you. If they stop paying, you start and that right there is a tax hike, Sparky. The Legislature can do it. But they have to find 40 votes in the House and 20 in the Senate to do get it done.
They simply don't have that many votes for this plan, so a tax hike is verboten — unless the Democrats totally roll over and let Uncle Doug rub their bellies.
What Ducey is trying to do now is to fudge it. The state sends $16.7 million each year to TUSD to comply with a federal court order meant to rectify past discrimination and segregation. The governor wants to send that bill back to property owners in the school district, tacking it on to their taxes. Under Ducey's plan, they are going to move it from TUSD's primary property taxes (which the state subsidizes) over to the secondary property tax bill (which the state does not subsidize).
The deseg bill still needs to be paid. The state isn't paying it anymore. So Ducey wants to stick TUSD taxpayers with an additional tax. That's a tax hike. And the Legislature is looking to raise taxes without the required two-thirds vote.
Bzzzzt! Sorry, Dougie.
Flashback to deja-vu
Ducey and the Legislature tried something similar a couple of years ago and the courts swatted the desperate shot back into the fourth row.
The fiscal year 2016 budget included a provision that capped what the state would pay to reimburse for the 1 percent limit at $1 million per county. The rest — as necessary — would be decided by an obscure state board established to provide oversight of property taxes based on some crazy formula lawmakers concocted at 4 in the morning when they passed the legislation.
Farming the determination of tax bills out to the oversight commission at least provided an eight-year-old's level of deniability before the courts. "Nuh-uh, wasn't me who raised the tax, your honor. It was that commission over there who did it. See?"
The county sued and won, surviving all the way to the universally conservative Arizona Supreme Court, which doesn't get enough credit for applying the law as written and not how the Right wishes it was written.
Now Ducey and the Lawmakers (which sounds like an early '60s nostalgia band) are not even trying to pretend to play it off. They're just jacking up your taxes.
The deseg shell game tells me the governor isn't particularly serious about his plan to dig for money to pay teachers more money. The deseg play is a small part of his plan, but c'mon. The funding for teacher raises he's touting will never exist.
Ducey's either straight-up running an election-year kick-the-can con, or playing this budget sleight of hand with IOUs, hoping money will somehow manifest itself and that doesn't work. Believe me. I've tried.