How to Bring Your Property Taxes Under Control
by Chad Kirkpatrick & Tom Jenney | View comments |
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The Arizona Federation of Taxpayers has put together a useful guide for lowering your property taxes.
If you are not angry about your property tax bill, you probably haven’t studied it yet. Many Arizona homeowners are seeing their property tax bills go up by hundreds of dollars. For many—especially older people on fixed incomes—exploding property tax bills will force some tough tradeoffs. In extreme cases, increased property taxes may force people out of their homes.
There are ways you can minimize your property tax bill, though. Courtesy of the Arizona Federation of Taxpayers, a state chapter of Americans for Prosperity, here are four steps you can take to bring your property taxes under control:
1) Demand that your taxing district officials lower their rates.
You will have to contact your county supervisors, city councilmen, school district board members, and the members of your water and library districts—among other local taxing authorities. Instructions on how to find and contact your taxing district officials are available at http://www.aztaxpayers.org/TaxDistricts.pdf .
When you contact your elected officials, you should ask them three questions:
A) What is the current tax rate for this taxing district?
B) How low must the rate go to keep me from paying more dollars than I paid last year?
C) How far will you reduce the tax rate?
Make sure you do your homework before asking those questions. Some elected officials have boasted to taxpayers that they have cut their rates by a few pennies. If officials actually need to lower their rates by a few dimes, they are not doing taxpayers much of a favor. In many of the districts subject to uncapped secondary valuations, tax rates may have to fall at least 30 percent to keep taxpayers from suffering from tax increases.
2) Vote against ALL new taxes, new bonds, and budget overrides.
The next special election in Arizona is Tuesday, May 15. In Maricopa County, there will be bond votes in Avondale, Chandler, Glendale, and Queen Creek, and budget override votes in Cave Creek Unified #93, Kyrene Elementary #28, Littleton Elementary #65, and Nadaburg Elementary. In Pima County, there will be budget override votes in Marana Unified #6, Sunnyside Unified #12, and Tanque Verde Unified #13. Contact your county recorder’s office for details.
3) Pressure your state legislators to restrain local taxing authorities.
The Arizona Legislature did a great job last year by (temporarily) zeroing out the county education equalization rate, putting Proposition 101 on the November ballot, and enacting a ten-percent cut in the personal income tax. One of the best arguments for a further reduction in the state income tax is that homeowners will need that extra cash just to pay their local property tax bills!
4) Work hard to get Serious Tax Reform passed on the 2008 ballot.
This is far and away the most important thing you can do. There are currently at least two committees at work crafting ballot initiatives that will incorporate elements of California’s famous Prop 13 tax reform. The most important element of any Serious Tax Reform proposal is to put a firm limit on the growth of all property tax revenue going to all taxing districts from all classes of property, including business property. This can be done by limiting the growth in assessed values or by limiting total levies—or both.
One model for Serious Tax Reform is SCR1025, a legislative referendum bill introduced by Sen. Ron Gould (R-Lake Havasu). The bill would limit future growth in assessed value to two percent per year for all classes of property. The referendum passed the Senate last year, but was stifled in the House.
Thanks to Prop 13, California was successful in clamping down on runaway increases in property taxes. Where California failed was in allowing other taxes to increase in the place of property tax levies. Arizona has a strong advantage thanks to Prop 108, which requires a two-thirds vote of the Legislature to increase state taxes.
Taxpayers must take action
Left to their own devices, Arizona’s local politicians will do very little—if anything—to lower their tax rates or restrain their spending. As usual, taxpayers must protect themselves. The Arizona Federation of Taxpayers is ready to help, but it’s really up to you!
vc@aztaxpayers.org
http://www.aztaxpayers.org
Read more articles by Chad Kirkpatrick & Tom Jenney
Your suggestions are good, but they don't address the real problem: property taxes are the only consumer tax based not on the purchase price, but on the percieved value of the purchased item years after it is bought. What is needed is a total paradigm shift in the idea of property taxes: if you want to tax my property, you tax it on what I paid for it. If I sell the property, or part of it, then you get to tax him for the value he paid. Otherwise, you're taxing me for a value I haven't paid for, and that, people, in my mind, is downright illegal.
Start supporting local and state officials that have this mindset, then we won't have to worry so much about being in an owned home on a fixed income.
Comment by daverock | May 1, 2007
Property tax has been broken nationwide for a long time. Local governments and school boards have take a blank check, from you the taxpayer, and overspent it. Schools in particular are guilty using featherbedding tactics to bolster their staffing, creating assistant superintendents with no duties and teachers with minimal academic credentials consisting of a half major in the field they teach and lots of make the students feel good rather than make them learn anything philosophy from their "university" which used to be a teachers college that got the dregs of the academic candidates.
There are three major areas to review when looking at taxes:
1. What was really spent line by line in the budget for the last 5 years versus the approved budget. Note the hiding places where funds are placed for later transfer and eliminate them. Force a truth in budgeting process where actual expenditures from the previous year are shown against the budget to determine the real increase. NEVER accept budget to budget comparisons…they are lies.
2. Fund school and government on a project basis with a definate set of outcomes to be obtained by a date certain then ruthlessly cut those that do not meet the criteria to provide funds for new programs that may accomplish the objectives. Education in particular loves to keep failing projects like ESL and lie about the outcomes.
3. When a tax revaluation happens hold on to your wallet! Politicians will call the reduced tax rate caused by higher valuations a tax cut then raise the rate and continue to claim a tax cut. Fortunately for the politicians most americans cannot compute the tip on a restaurant tab without a calculator so they will believe this shell game.
I also agree that property should be taxed for the amount it was purchased until it turns over and then be taxed on the amount it should have sold for in an arms length transaction.
Comment by Mickey G | May 1, 2007
averock:
What you are proposing is a California-like Prop 13. The tax was 1.25% of the purchase price (1% + 0.25% for current obligations), and the assessed value could go up only 2% per year, except when it was sold, at which time it was re-assessed at the full new sales price. Buyers knew almost exactly what to expect.
We lived under Prop. 13 for 20 years, and it seemed to work well.
Some interesting factors: Because of a hot real-estate market that began in 1975, everyone’s property got re-assessed like you indicated. State legislature was stalemated by the two groups: one group wanted to give tax relief in direct proportion to how much the owner paid; the other usual suspect (you can guess which one) wanted to give it INVERSELY to how much the owner paid. Finally, the people took matters into their own hands. Every year since its passage, though, the politicians tried to amend it, so it was a constant battle.
Comment by sedonaman | May 1, 2007
Daverock,
You are precisely correct. The actual solution to the problem is to pay the tax once on the current purchase price of the property. Not a recurring tax year to year based on speculative comp appraisals by the local franchise tax board.
Comment by Asmodeus | May 2, 2007