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Can Pima County property owners handle the taxing truth?

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Can Pima County property owners handle the taxing truth?

Truth in taxation explained as Southern Arizona gov'ts take action to follow late state budget

  • Slow economic recovery in Nogales after the coronavirus pandemic has left the city's budget about as tight as tight gets.
    Miranda Cyr/Cronkite NewsSlow economic recovery in Nogales after the coronavirus pandemic has left the city's budget about as tight as tight gets.

Governnment leaders around Tucson and Southern Arizona are finishing up the budget process this week — even though the legal deadline of June 30 has come and gone.

The Pima County Board of Supervisors adopted a tentative budget last month, followed by votes on a final $1.9 billion budget that wound up Tuesday.

A couple public comments railed against the slightest of tax increases included in the Fiscal Year 2022-23 budget.

This from Pima County resident Elizabeth McGwire:

We are doing with less. We have cut out many, many expenditures, including reducing the amount of food and the number of meals we eat each day. We have have had to stop going places, including to activities like seeing our friends and family just because we can no longer afford to put gas in our cars. I can’t understand why you think we have any more money to give you through taxing us.

A couple points homeowners should keep in mind after they have received state-ordered "Truth in Taxation" notices: 1) Try renting. I know one person pretty well whose rent looks to be going up 80 percent over this time last year; and 2) Pima County taxes went down this year. They didn't go up.

County tax bills reflect an engine's worth of moving parts as home values rise and multiple taxing authorities set their rates across multiple accounting columns.

The county this week unanimously voted to raise Library District taxes by one penny for every $100 of assessed value. But the supervisors offset that penny with 14-cent reductions in other parts of the county tax plan. 

That one cent will go to pay for a new early childhood education program funded by federal coronavirus assistance dollars through Fiscal Year 2024. The board has voted to start kicking in some cash to prepare for the federal dollars ending.

Overall, supervisors approved a total tax rate of $5.0652, per hundred dollars of assessed valuation, which is actually 13 cents per $100 less than the fiscal year that ended June 30.

In Arizona, county taxing regimens get separated into different taxing columns. One column can increase. The others can decrease by more but state law still requires the county "warn" property owners ahead of time about even a tenth of a cent in any column.

I have argued a county PAYGO Plan, to convert falling debt payments into higher taxes to pay for capital improvements, is a tax increase even if the final bill is less. However, supervisors shelved the tax this year because the county wound up with a sizable surplus to fund the capital. 

Overall, county taxes have come down. 

However, property owners pay their tax bill to the County Treasurer's Office but that includes all property taxes by any government with the power to levy them. What people pay, depends on what their school district, fire district, town or city are charging. So what supervisors approved is only a piece of the puzzle.

Even if the rates have fallen, the bill can still increase. Property taxes in Arizona are based on $100 of assessed value. So if the County Assessor's Office notes that your property has increased in value due to the crazy real estate market, your tax bill will increase. Even so, state law limits increases in assessed property values to 10 percent per year.

So McGwire wasn't crazy to think the tax bills increased even if tax rates have fallen. 

The county was wise not to convert a $138 million "fund balance" into a tax cut or new programs. 

Bartenders and busers know not to change a monthly budget over a good night of tips. The windfall may be temporary. The surplus the county has stockpiled could prove a very good thing heading into uncertain economic times.

The Truth in Taxation law was meant to inform people. I think it just confuses as much as anything else.

Mo money, mo money, mo money

Supervisors voted on final budgets for the Stadium District Board, Improvement District, Library District and Flood Control District.

As it was the first meeting of the new fiscal year, the traditionally dull part of the agenda was packed with big spending commitments to other outside groups like the Convention and Visitors Bureau ($250,000),, JobPath, Inc. ($2 million), and the regional economic development organization Sun Corridor Inc. ($650,000) to keep providing agreed-to services.

On a separate note, during executive session, the board discussed a tax lawsuit against the local nonprofit The Marshall Foundation, which holds a ton of real estate around the University of Arizona. So they giveth. They taketh away.

Even the city's ancient nemesis the city of Tucson received $3.7 million to provide emergency food and shelter for those who need it.

The county voted, too,  on contracts to Apple Computers, Inc. Hewlett Packard Enterprise Company and Lenovo Computer Solutions to for hardware and software.

Just so long as they can all talk to each other, I guess. 

The big ticket item on the agenda was a $66.8 million dollar program to repair all county roads to civil engineering standard of "very good condition"  by 2030.

The supervisors approved a series of small-dollar investments to local nonprofits. The total recommended to these outside agencies is $3.6 million, with the biggest beneficiary being the Pima Council on Aging. The elder support organization stands to get just shy of $300,0000.

The budget also includes money for tourism (i.e., the Tucson Botanical Gardens and El Tour de Tucson); and social services organizations (Southern Arizona Legal Aid and Catholic Community Services). There are dozens of these individual line items and most fall between $10,000 and $30,000. 

This kind of funding used to be fodder for political opposition. Pick the least sympathetic recipient and tie the whole $3.6 million to that group.

Isn't this what school choice is? Public money to nonprofits without a ton of oversight?

Super tight budgets

Two cities and a Southern Arizona county facing a tight budget year are behind in the budget process and also technically violating state law.

However, the Legislature's unnecessary foot dragging and gamesmanship over the Fiscal Year 2022-23 state budget left hanging elected leaders living on the fiscal edge.

Nogales has been plodding along with a local economy slow to recover from the COVID pandemic and the Trump administration's border crackdown.

It's proposed $65,327,312 budget is exactly equal to its projected $65,327,312 in revenues. If they pull that off in real-life, they should get a billion-dollar bonus from someone. 

With things that tight, it would make sense that the city had to know exactly what the state could deliver on in terms of revenue sharing. How (or if) sales taxes would be distributed to cities and towns was not settled until June 22. The budgets were due by July 1.

Nogales has so far only passed its tentative budget, which is a spending limit it must abide even if numbers are moved around for their final budget.

The city's police and fire departments were the big winners, receiving and more than  $3 million than last fiscal year.

The city of South Tucson voted on the approval of its final budget during its regular meeting Tuesday. 

Its $8.2 million budget is projected to be about $41,000 in the red, but a fund transfer (borrowing money from a contingency fund balance out).

The council approved the tentative budget during its previous meeting last month. 

South Tucson's budget is not posted in the agenda material, but can be found on the city's website. The budget wasn't posted at all when the original tentative budget was first voted on back in May.

Santa Cruz County supervisors are following that lead. We have no idea what the budget is, what it's raising or how the money might be spent. 

This will almost certainly change. It better. Supervisors can't vote on a final budget until it's posted. 

What about all these late budgets? Meh. 

Pima County pushed it's budget approval right up to the deadline with the swagger: "Yeah we did and what are you going to do about it?" On the other hand, the board must appropriate money to spend it and that can only be done by a vote during a meeting. So if an appropriations vote happens the same day the final budget is (finally) approved, there's no actual delay. 

Technically, I guess, someone could sue over a late budget but it's one of those things where the judge would just rule "pass the dang budget," and the  government would. 

So the long as the delay is a week or two and not a month or two, the money can be moved and around with snazzy accounting. One would think that one of these days, toying with budget deadlines may come back to bite governments. 

Wouldn't it be nice if the government had to obey its laws the way the rest of us do?

Paying scale

Finally, the big news on Oro Valley's agenda during its Wednesday meeting was an updated pay plan for town employees.

The town will spend $825,000 more on pay for workers as a result of the new salary scheme but it's a bit more involved than just a raise.

The way the civil service system works is that employees get more money as they move up "steps" in a salary structure. Under the new system, each step  Oro Valley comes with a 5 percent raise. This way, the mayor's cousin shouldn't make twice as much in a city job than the person hired 15 years previous.

The highest salary in a category can only equal 50 percent more than the minimum.

However, the whole shebang needed to be shifted toward an increase because the minimum wage is slated to hit $15 an hour in 2025 and the town is getting a head start on adjusting salaries to make way for that increase.

Another item on a very light agenda has been in the works for months, and requires developers seeking new projects in the town to hold virtual neighborhood meetings. In-person meetings were the requirement previously.

The new system is meant to foster more participation because neighbors near impending developments can attend from their own home.

I get that.

If it's easier for everyone, fine, but does anyone else have the sense that society is overdoing the whole "virtual thing?" It's good for some stuff but I'm not sure it's best for everyone. 

We are an entire nation that more and more needs to put down our phones. Phones have become to Gen X, Z and Millennials what smoking was to the Don Drapers of the world — just something you constantly do because ... y'know ... it's what you do.

Go out and play with your friends and attend public meetings together.

Blake Morlock is an award-winning columnist, who worked in daily journalism for nearly 20 years and is the former communications director for the Pima County Democratic Party.

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