Sponsored by


Note: This story is more than 3 years old.

What the Devil won't tell you

Pima County moves to get itself sued to fight Ducey's sneaky TUSD tax hike

Curveball in convoluted deseg battle in $16.7 million game of chicken with Az Constitution

Called it!

Though in this case, I deserve about as much credit as predicting Bill Maher might roll a joint.

When Gov. Doug Ducey signed a bill to give teachers a 20 10 something-percent raise, he stuck Tucson Unified School District homeowners with a tax increase. Before the law was passed, I pointed out how the move was unconstitutional in a column that ping-ponged around social media like nothing the Devil hasn't told you.

Ducey is trying to squeeze the state between two constitutional provisions meant to protect taxpayers, and he has decided to tear up one without disturbing the other. He's likely to find out he can't do that.

The subsidy part of the 1 percent cap is a relic of the days prior to Gov. Fife Symington when, the Republicans were less ... well ... let's just call them "strident." It's trapped Republican lawmakers into subsidizing the budgets of spendy school districts ever since.

For the second time in three years, the state has tried to dodge the restraints of the two provisions. The first time failed. The second seems awfully similar. In both cases, the Legislature tried raising taxes in Pima County without a 2/3 majority.

Well, the lawsuit that'll try to toss that tax bump is now looming, but boy is the situation convoluted. So I'm going to write a short (for me) piece describing what happened and where it's going.

The county has voted to force the tax issue — on the state, TUSD or itself. Either way, someone is getting sued over a tax hike that looks illegal as a skidding U-turn on I-10.

TucsonSentinel.com relies on contributions from our readers to support our reporting on Tucson's civic affairs. Donate to TucsonSentinel.com today!
If you're already supporting us, please encourage your friends, neighbors, colleagues and customers to help support quality local independent journalism.

I have to explain accounting, so if you bear with me, I'll pull a John Oliver and reward you with the a video mocking craft beer nomenclature at the end of the column. Trust me, it's hilarious.

The Pima County Board of Supervisors voted this week to basically ignore a new state law that forces a tax increase on Tucson Unified School District homeowners. Explaining it requires understanding everyone's favorite topic. Here goes:

Column A, Column B

County property owners get one tax bill with two columns. Column one is a primary tax that pays for daily operations of local governments. Column two is the secondary property tax which funds special districts (think Rural Metro Fire Department) and bond payments. The key to the secondary taxes is that they are typically paying for things voters specifically approve ahead of time.

Each line in the primary property tax column is set independently by the separate cities, county, school districts and community colleges. Together those bills get sent to the County Treasurer's Office, which mails out the bills, collects the payments and sends them to the proper jurisdictions. The Arizona Constitution caps the amount homeowners owe to all the jurisdictions at 1 percent of the value of their home.

That's not a cap on how much government can tax. It's a cap on what the homeowner will pay. It's like Tax Welfare. So if the combined tax rate from all of those jurisdictions is 1.5 percent, the state pays the extra 0.5 percent.

With me so far? Good.

The right hand and the far right hand

This year, the Arizona Legislature moved desegregation funding for school districts operating under court orders to deal with lingering discrimination from the primary tax column to the secondary tax. Homeowners pay the entirety of the secondary tax.

Homeowners living in TUSD have long ago saw their combined property tax shatter the 1 percent cap and will be on the hook for their share of the $16.7 million annual deseg bill.

The state used to pay that. But thanks to Ducey and his Legislature, that deseg portion of the school district's budget now sits in the secondary property tax column. So the state doesn't have to pay it. TUSD homeowners will have to pay more, instead.

That's a tax increase, any way Ducey chops it, spins it or dices it. Under his budget, homeowners in TUSD will see their property tax bills increase.

Thanks for reading TucsonSentinel.com. Tell your friends to follow us on Facebook and Twitter.

And that's a problem..

The Arizona Constitution also prohibits the state from raising taxes without a two-thirds vote of the Legislature. The vote to modify the tax bill did not receive the support of 20 state senators or 40 votes among House members.

So just moving the tax liability from one side of the bill to the other becomes, in all likelihood, an unconstitutional tax increase that a court will toss out.

Conservative lawmakers have previously argued that any increase in revenue, including Motor Vehicle Division fees, amounted to a tax increases that would require a two-thirds vote. A property tax bill increasing is an actual tax. It says so right on the bill.

Sue thyself

Now, here's what the county voted to do, to kick start the legal process: They are going to continue to calculate the deseg money as part of the 1 percent cap.

The county sought a legal opinion from the Arizona Attorney General's Office to see if they could continue to count the money as if the state will pay the bill. None of our Pima County legislators have forwarded that request, so AG Mark Brnovich hasn't weighed in as state deadlines approach to set the countywide tax levy.

So the county board is just going to do it themselves and expect the state to continue to pay the excess beyond 1 percent on homeowners.

If the state doesn't do that, then the county won't have the money to give the school district. Well, what's TUSD going to do should it find itself short the money after getting stiffed by the state? The district would sue the county and the state.

Lawsuits require "harm" for "standing." Someones gotta take the punch before crying "low blow." So the county move is meant to inflict harm on TUSD.

Predicting what the courts will do gets dicey but two years ago the county won a similar attempt to undercut the 1 percent provision. This case seems like a judicial slam dunk.

The legal process last time took a while, and the school district needs money to cover the bills for the upcoming school year.

So, as County Administrator Chuck Huckelberry put it in a memo to the board, it may be necessary to force a judgment ASAP:

“Inviting a legal action is an unusual step. But in this case, without some assurances from the state regarding their interpretation of (Senate Bill) 1529’s impact, some sort of legal action seems almost inevitable. Allowing it to be initiated sooner rather than later will hopefully lessen the period of uncertainty for taxpayers, the county and TUSD,” he wrote.

Well, that's one way to do it.

The Legislature has always hated subsidizing local tax hikes. The one thing the lawmakers hate more is sending money south of the Gila River. Throw in the money is needed to pay for desegregation, nonetheless and the right wingers in the Capitol Complex are right there beside themselves.

It doesn't take next-level empathy to see they have a valid point. There's a moral hazard of sorts involved in taking the bite of tax hikes and TUSD has been wrestling with desegregation for 40 years.

On the other hand, there's some justice to today's far right trying to get themselves from the pincers of movement conservatives of yesteryear. They jumped on the Proposition 13 bandwagon in the early 1980s as part of Tax Revolt I. Then they got voters to approve the super-majority requirement in 1992, forgetting they were locking in the taxfare program.

Sponsorships available
Support TucsonSentinel.com & let thousands of daily readers know
your business cares about creating a HEALTHIER, MORE INFORMED Tucson

Oops. The right has made the rules in Arizona and now finds itself frustrated by them. Excuse the rest of us for chuckling.

Now let me reward you with with a video about stupid beer names.

Blake Morlock is a journalist who spent 17 years covering government in Arizona and also worked in Democratic political communications. Now he’s telling you things that the Devil won’t.
Update: A clarification was made regarding the AG’s Office not having yet received a request for a legal opinion on the tax issue.

- 30 -
have your say   


There are no comments on this report. Sorry, comments are closed.

Sorry, we missed your input...

You must be logged in or register to comment

Read all of TucsonSentinel.com's
coronavirus reporting here »

Click image to enlarge

Paul Ingram/TucsonSentinel.com


news, politics & government, business, education, local, arizona, opinion, analysis, breaking, columnist

TucsonSentinel.com publishes analysis and commentary from a variety of community members, experts, and interest groups as a catalyst for a healthy civic conversation; we welcome your comments. As an organization, we don't endorse candidates or back specific legislation. All opinions are those of the individual authors.