The Politics in Your Tax Bill

September 23, 2015 by  

Recently, Maricopa County Treasurer Hoskins included a political opinion piece letter in our property tax bills at taxpayer expense.  Concerned taxpayers should know that Mr. Hoskins’ editorial is filled with inaccuracies, omissions, and misleading statements concerning Prop. 117 and the specific protections in place for homeowners.  View the discussion here.
Here are some quick facts:
1.   AZ has one of the most complicated property tax systems in the nation.
2.   The system favors homeowners, like you and me.
3.   In AZ, homes are taxed at a lower assessment ratio than businesses. For example, a business valued at $100,000 pays tax on 18.5% or $18,500 of the value. Whereas a home valued at the same $100,000 pays taxes on 10% or $10,000 of the value.
4.   Unlike business property, home-owner occupied homes receive a rebate of up to $600/year, called the Credit for State Aid to Education.  (notated on your tax bill)
5.   Residential primary property taxes are capped at 1% of the home’s limited value. Business property has no such cap. Some AZ school districts intentionally raise the tax rate to exceed the 1% limit knowing home owners won’t complain because their tax is capped, but businesses and the state will have to pay more.
6.   Starting in 1980, Arizona realized that its business property taxes, ranked as high as 3rd in the nation, were causing businesses to locate to other states. In an attempt to attract more high paying employers to the state, the state started to phase down the business property tax assessment ratio. These changes were approved by both Democratic and Republican governors.
7.   During that same time, the legislature increased the homeowner rebate multiple times in order to protect homeowners.
8.   Proposition 117 was overwhelmingly passed by the voters in 2012, went into effect in the 2015 tax year and capped the annual increase in the limited (taxable) value of property to 5% per year. 
Mr. Hoskins also mischaracterized Proposition 117. He suggests that Prop 117 caused residential taxes to be higher than they otherwise would have been and blamed the Arizona Tax Research Association and the Legislature for promoting changes that would ostensibly benefit corporate interests. This is untrue. In fact, Prop 117 helped homeowners this year. Even though residential assessed property values in Maricopa County increased by 25% for the 2015 tax year, Prop 117 limited the increase in the taxable value to 5%.
 
If nothing else, perhaps Mr. Hoskins’ actions cause citizens to take a closer look at their property tax bills before voting for a tax increase. People don’t always realize how their votes affect their taxes.  (Americans for Prosperity has a great piece about this!)
 
For example – in a typical tax bill like mine, 70% of the taxes go to schools, and school overrides are again being placed on the ballot this Fall.   Voters recently approved $935 million in bonds for the Maricopa County hospital – one of the many ‘special taxing districts’ that can levy and increase our taxes – , another $369 million in school general obligation bonds and $89 million/year levies for overrides for school districts. This November Maricopa County voters will vote on $804 million in school bonds and $147 million in annual override levies for the schools.  And these numbers don’t even include bond requests at the city level
 
Furthermore, prior to 117 tax values could skyrocket during times like the housing bubble. Mr. Hoskins’ analysis of Proposition 117 is totally off base. In his letter he suggests that large businesses will benefit more than homeowners from the proposition. What he fails to realize is that most of the high value business properties he references don’t even benefit from Proposition 117 because they are assessed by the Department of Revenue and those assessments weren’t even included in Proposition 117. In addition, the evidence is clear. Even though residential assessed values went up 25% in Maricopa County, Prop 117 limited the increase in the taxable value to 5%.
What motivated Mr. Hoskins to author such irresponsible rhetoric? Perhaps it is because the legislature wouldn’t approve his request to spend $1 million more in advertising for the elderly assistance fund.  This program, administered exclusively by Mr. Hoskins, essentially taxes the poor to help the low-income elderly.  Additionally, the fund still likely has over $5 million available – sufficient to help our low-income elderly for many years.
Whatever the reason, I hope this matter causes all Maricopa County taxpayers to study their property tax bills more closely.   Read Why Hos Hoskins in wrong about your taxes. And ATRA’s comprehensive response .

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