By Linda Bentley | September 16, 2015

County spending the same just shifting the property tax burden

Due to passage of Prop 117 in 2012, the tax burden that shifted to residential property owners will be locked in for years
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PHOENIX – Property tax bills arrived in the mail this week and were accompanied by a lengthy letter from Maricopa County Treasurer Charles “Hos” Hoskins explaining why our residential property taxes have increased by an average of 20-30 percent.

Hoskins provided a history of tax rates for large commercial properties, such as mines, utilities, railroads, airlines, pipelines, telecommunications and others, which are valued by the Arizona Department of Revenue (DOR), while the remaining commercial properties: shopping centers, manufacturing and general business, are valued by the county assessor.

Residential properties, which include rentals, owner occupied primary residences and non-primary homes are also valued by the county assessor.

Residential properties have been assessed for taxes at a ratio of 10 percent since 1973, whereas the assessment ratio for most DOR valued commercial property was 50 percent in 1979.

That assessment ratio dropped to 25 percent in 1999, to 20 percent in 2012 and will drop to 18 percent in 2016, a total drop of 64 percent.

Meanwhile, commercial property valued by the county assessor had an assessment ratio of 25 percent through 2005, dropping to 20 percent in 2012 and will drop to 18 percent next year for a total drop of 28 percent.

Hoskins stated, “All of these reductions in taxable value were enacted by the legislature at the urging of lobbyists hired by owners of large commercial properties.”

He goes on to explain the reduction in taxes from reduced assessment ratios of one class of property simply shifts the burden to other classes, mostly residential.

Hoskins said if you divide your tax by five it will give you an idea of how much more taxes you are required to pay this year due to special interest tax breaks.

Due to passage of Prop 117 in 2012, the tax burden that shifted to residential property owners will be locked in for years.

Prop 117 had some other provisions to limit increases in commercial property valuations, limiting them to 2.3 percent next year when the assessment ratio drops to 18 percent.

Meanwhile Prop 117 still allows residential property valuations to increase by a full 10 percent.

Prop 117 was promoted by Arizona Tax Research Association (ATRA), whose membership is comprised of lobbyists for high valued commercial properties.

Hoskins said ATRA withheld the information about residential property valuation increases from its campaign materials and simply stated Prop 117 would lower property taxes, which passed by approximately 55 percent of the vote.

What is not addressed with the reduction of assessment ratios is the county’s budget and spending.

Prop 117 neither raises nor lowers the total property taxes and rather than the county tightening its belt and reducing spending, it is simply shifting some of the tax burden to residential property owners, who, even though many may have seen a reduction in their property’s valuation, are socked with a higher tax bill nonetheless.

Hoskins suggests the only way to achieve change is for people to contact their district legislators.

He emphasized, “Voicing your opinion to anyone other than your legislators will change nothing.”

If you’re not sure who your district’s legislators are, visit and click on the “How do I find my legislators” link.

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