Pima County Property Tax Rate to Decrease Slightly in Fiscal Year 2023 | Government and politics
As Pima County prepares to pass its budget for the next fiscal year, it discusses the annual property tax rate it will charge to fuel much of the budget spending.
The property tax rate under the proposed budget for fiscal year 2023 will decrease by 13 cents, but the overall tax the county will collect is expected to increase by more than $9 million, primarily due to rising home assessments.
County Administrator Jan Lesher recommends that the county’s combined property tax rate decrease slightly from $5.1952 per $100 of taxable net worth to $5.062 in the next fiscal year. This is expected to bring in over $510 million in overall property taxes.
The rates would mean that main county property taxes on a $100,000 home would be $387.64, down from $376.98 currently. The county’s combined rate would be $506.52, down from $519.62 currently.
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The rates passed by the board will apply only to property taxes levied by Pima County and not to other taxing authorities such as local schools and fire districts. County property taxes are made up of a primary tax that goes into the general fund and three secondary taxes for libraries, debt services, and flood control.
Lesher is proposing a budget of $1.9 billion for fiscal year 2023, and the combined property tax rate will fund 26% of that, according to the recommended budget.
This will be the eighth time in 10 years that the county’s property tax base has increased. New developments, rising house prices and appraisals contribute to this increase in the tax base.
There were 5,104 new residency permits in 2021, an increase of nearly 18% from the previous tax year, according to the Pima County Assessor’s Office, which is responsible for assigning values to properties.
The net assessed value, or determined assessment of properties that the county used to calculate property taxes, is $10.1 billion for the next fiscal year, an increase of 4.5% from the current year. , according to the proposed budget.
Pima County Assessor Suzanne Droubie said a growing tax base should reduce the individual share of the cost.
“As (the tax base) goes up, your taxes will actually go down a bit,” she said. “We have to cover the county budget, and the value of your property determines your share of that budget that you are responsible for paying. I see it as one big pie, and everyone gets a slice… the more people you add and the more properties you add, the smaller everyone’s slice technically is.
The Supervisory Board will adopt the property tax rates in August. The county will send property tax bills in September based on the assessment notice county residents received for their properties in February 2021.
But Droubie said it was hard to say what those bills would look like. Property assessments received by residents in February were based on 2021 assessments.
“There’s a lot going on right now that affects the overall county budget and because of that, trying to predict what people’s taxes are going to do is really difficult,” she said. “Seeing what’s happening with the sale prices (of apartment houses), those sales are what we use to appraise properties at the county assessor’s office. So as those sales numbers go up, so does your value.
However, a constitutional amendment passed by Arizona voters in 2012 that sets a 5% cap on the increase in net taxable value the county can impose from year to year “goes a long way in managing the ‘rise in that tax bill,’ Droubie said. .
State status also requires tax authorities to alert the public when the property tax rate will be higher than what the law considers “neutral”: the previous year’s levy plus additions to the new construction tax base. The county’s proposed primary property tax rate is approximately $10.8 million higher than the neutral rate.
According to Lesher, achieving the state-defined “neutral” rate will be difficult for the county as long as it has its PAYGO program in place.
The PAYGO program was adopted by the board in 2019 and funds capital infrastructure projects through property taxes instead of debt-accumulating bonds.
However, there is no proposal to increase primary property tax rates. Lesher said revenue has been better than expected this year, leaving the fiscal 2022 general fund balance at about $137.8 million, or $92 million higher than expected.
Instead of raising the primary property tax rate to continue funding the program, the county can use these excess funds.
“If we were to just take next year by itself and look at the exact formula which is council policy to implement PAYGO, we would actually have to raise the primary tax rate by a few cents. And we just didn’t want to do that,” Lesher said.
Pima County is known for its high property tax rates compared to other counties in Arizona. Supervisor Steve Christy often hears these concerns and wants the proposed rates to come down further “without negatively impacting the PAYGO program”, perhaps cutting funds elsewhere.
“I strongly believe there is even more room for the property tax rate to be set lower than the simple 13 cent reduction that is being proposed,” he said. “There are a lot of recommendations made — $5.5 million to expand the Pima County Health Department. Questions of this nature should certainly be analyzed with respect to property tax rates and the PAYGO program.
Although it is proposed that the primary levy will remain the same, the secondary library levy will increase by one penny in preparation for the long-term funding of the Pima preschool program which offers preschool classes for children ages 3-5. years from low-income families. .
Another expense the county is planning this year is an estimated $105.5 million cost that the state transfers to counties. That includes $53 million for Arizona’s long-term care system and $20 million for superior and juvenile court salaries. The total costs the state will pass on to the county will not be known until the Legislature passes its final budget.
Table adopted a policy in August 2021 pass on these increased costs to taxpayers. But Lesher said the policy will not be implemented yet. Other sources of funding, such as this year’s general fund balance, will be used instead.
“We’re looking at maybe eight to ten cents or more that someone’s tax bill could go up to account for this transfer of costs from the state,” she said. “Ultimately, the board agreed that it was not good policy at this stage and we can wait to implement it.”
Contact journalist Nicole Ludden at [email protected]