Ahwatukee property owners will be getting a double tax whammy when the new fiscal year begins July 1.
For the fourth consecutive year — and the 14th since 2003 — Ahwatukee homeowners and the rest of their Phoenix counterparts will be seeing an increase in their primary property taxes — a move that a watchdog group ripped in a statement.
They’ll also be paying more to Maricopa County too, according to a Truth in Taxation notice released by the county board of supervisors last week.
Phoenix’s proposed primary property tax rate for 2019-20 of $1.3055 per $100 of assessed valuation is lower than its 2018-19 rate of $1.3163 per $100 of assessed valuation.
In its Truth in Taxation notice filed last week, Phoenix officials stated that overall increases in assessed valuation result in a 3 percent increase in primary property taxes for the average Phoenix property owner, though “individual experiences may differ based on unique property variances.”
Maricopa County also released a Truth in Taxation statement that tried to put a more positive slant to their tax increase, citing the growing economy and its impact on elevating property values as the reason why taxes would be going up.
State law requires local and county governments to issue a Truth in Taxation statement when the average primary property tax bill increases — even if the primary property tax rate is reduced.
Although the law does not address secondary property taxes, Phoenix officials said the secondary property tax rate for 2019-20 will remain constant at $0.8241 per $100 of assessed valuation.
Secondary property taxes pay the bonded debt service for facilities like libraries, police and fire stations, storm drains and parks.
“The proposed tax increase will cause the city of Phoenix’s primary property taxes on a $100,000 home to be $130.55 (total proposed taxes including the tax increase),” the city stated. “Without the proposed tax increase, the total taxes that would be owed on a $100,000 home would have been $126.49.”
It also noted the proposed increase excludes increased primary property taxes received from new construction and levies for voter-approved bonded indebtedness or budget and tax overrides.
The city will hold a hearing on its tax rates June 19, 2019 at 2:30 p.m. in Phoenix Council Chambers, 200 W. Jefferson St.
The Maricopa County Board of Supervisors’ Truth in Taxation statement said it “does not control property values, but as the economy grows, property values increase and some property owners may pay more in taxes as a result.”
The county’s 4.2 percent primary property tax increase would raise primary property taxes on a $100,000 home from $134.44 to $140.09.
The county also is hiking the secondary property tax rate for the flood control district by 5.1 percent, which would increase secondary property taxes on a $100,000 home from $17.05 to $17.92.
And it’s hiking the secondary property tax increase for the library district 4.1 percent, which would increase secondary property taxes on a $100,000 home from $5.34 to $5.56.
A public hearing is slated for 9:30 a.m. June 24 in the supervisors’ conference room on the 10th floor at 301 W. Jefferson though a final vote on the increase will not occur until Aug. 19.
The board also noted “Historically, Maricopa County receives 11 cents of every dollar paid in property taxes. The county’s tax levy in FY 2020 is $140.5 million below the maximum amount allowed by state law, meaning the county collects less in taxes than it could.”
Records show Phoenix published a Truth in Taxation notice 14 times since the law requiring them was passed in 1996, according to city Councilman Sal DiCiccio’s office.
They were published eight years in a row between 2003 and 2001, twice between 2012 and 2013 and ever since 2016.
The Arizona Tax Research Association, a taxpayer watchdog group that’s been around for 75 years, criticized the city increase, stating Phoenix could avoid an increase if it just raised overall tax revenue by the amount it will get from new construction.
It also noted that the surging economy is yielding 5 percent increases in sales tax and other levies.
“Given these increases, it is surprising that the city plans to raise property taxes $5.3 million,” the association said.
“Some local governments will scoff at these tax increases because the rate is not increasing, conflating sales and income tax rates with property taxes. Increased economic activity will produce more revenues at the same rate for sales and income taxes,” it said, adding:
“Taxpayers are smart enough to realize their ability to pay property taxes is not tied to the rising value of property in their jurisdiction. When taxpayers are informed by their mortgage company that their monthly payment is increasing, they will not find this justification clever.”
It also called Phoenix’s tax increase “particularly puzzling” because of the “high combined tax rate problem they face.”
“Combined property tax rates in central Phoenix, for instance, are 40%-60% higher than most other urban Maricopa areas and are more than double that of Scottsdale. This seriously hampers commercial and industrial growth in Phoenix,” it said.
The association said Phoenix’s property taxes are among the highest in the west, adding that the city “could go a long way towards helping its economic development by not adding to it.”