Tuesday, September 22, 2015

Arizona State Senator Lesko Property Tax Update

Senator Lesko Property Tax Update
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Recently, Maricopa County Treasurer Hoskins included a political opinion piece letter in your property tax bill at taxpayer expense. After review by Senate staff, tax experts, and lawyers, it has been determined that Mr. Hoskin’s editorial is filled with inaccuracies, omissions, and misleading statements.
In his opinion letter, Mr. Hoskins used the wrong assessment ratio in the base year of his analysis and has totally ignored the multiple increases to the homeowners’ rebate passed by the legislature specifically designed to protect the homeowner.
Mr. Hoskins also mischaracterized Proposition 117, which was passed by a majority of the voters in 2012. He suggests that Prop 117 caused residential taxes to be higher than they otherwise would have been. 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%.
Leadership in the Senate has reached out to the county treasurer’s office. I hope that Mr. Hoskins will realize his misstatements and correct them.
If nothing else happens, I hope this controversy causes you to take a closer look at your property tax bill before you vote for a tax increase.  If your bill is like mine, 70% of the taxes go to schools, and in my school district, a school override tax increase is again being placed on the ballot. Voters recently approved $935 million in bonds for the Maricopa County hospital, 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. These numbers don’t even include bond requests at the city level. People don’t always realize how their vote affects their tax bill.
In an attempt to clarify, I’ve written some bullet points to help address Mr. Hoskin’s letter:
  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 are given a rebate of up to $600/year, called the Credit for State Aid to Education.
  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 made sure to increase the homeowner rebate multiple times in order to protect homeowners.
  8. Proposition 117 was overwhelmingly passed by the voters in 2012 and went into effect in the 2015 tax year. It capped the annual increase in the limited (taxable) value of property to 5% per year. Prior to the proposition 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%.
I hope I have cleared up some of the confusion over Mr. Hoskins political opinion letter. I have no idea why he wrote it. Perhaps it is because the legislature wouldn’t approve his request to spend $1 million more in advertising for a program he administers. Or perhaps it is because the legislature ended a funding mechanism run by his office that unfairly targeted low income homeowners that were behind on their taxes. Whatever the reason, I hope that his letter has caused you to study your property tax bill more closely.
If you have any other questions or comments, please contact me atDLesko@azleg.gov or 602-926-5413.
Together, we can make a difference.
Sincerely,
Debbie Lesko
Arizona State Senate
Legislative District 21
http://debbielesko.org/

American Freedom by Barbara Has NOT received any compensation to post this information,it is a courtesy post

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