Members of the Pinal County Board of Supervisors say they wouldn’t raise property taxes unless it was a last resort. But with some board members feeling as if Gov. Doug Ducey and the Legislature have them over a barrel, a vote passed on Wednesday for a tax increase to be implemented next fiscal year.
In a 3-2 vote, the board approved giving County Manager Greg Stanley direction to prepare the fiscal year 2016 budget based on a 20-cent increase in the primary property tax rate — from $3.79 per $100 of net assessed value to $3.99. The 20-cent increase is expected to generate an additional $4 million of revenue for the county in the year beginning July 1.
Chairwoman Cheryl Chase of San Tan Valley, Vice Chairman Pete Rios of Dudleyville and Supervisor Todd House of Apache Junction voted in favor of the increase, while Supervisors Steve Miller of Casa Grande and Anthony Smith of Maricopa voted in opposition.
“I’m a no-tax guy, but I’m also a realist,” said House, who along with three other Republicans who joined the board in January 2013 promised not to raise property taxes. “We had no idea the state (Legislature) was going to cut another $4.6 million from us.”
Stanley said the new state budget, which imposed $4.6 million in new cuts from Pinal County, also includes about $2.3 million in ongoing cuts.
Some supervisors and Stanley have argued that Ducey is balancing the state budget on the backs of Arizona’s 15 counties.
“No one on this board wants to increase the tax levy,” said Rios, the board’s lone Democrat, adding that the $4 million generated in revenue from the tax increase won’t even cover the $4.6 million in new cuts by the state.
Rios said Ducey and the Legislature claim they balanced the state budget without raising taxes, when in reality deep cuts all but forced the hand of the counties to raise taxes in order to provide a similar level of services as what residents have been receiving.
Rios said he was concerned about the amount of services that would have to be cut if a tax increase wasn’t factored into the equation. He said he wasn’t comfortable with going anywhere near 5 percent in the county’s reserve fund, which would have occurred if the county stayed with a $3.79 tax rate and imposed a 5 percent across-the-board budget cut to all departments.
Instead, the board proposed a 4 percent budget reduction in addition to the tax increase. That 4 percent cut will come on the heels of a 2 percent cut that was approved by the board in February.
Sheriff Paul Babeu, as well as other elected officials and department heads, said they could handle an additional 4 percent budget cut but were worried about providing services if cuts exceeded 4 percent.
Rios also criticized Ducey for making comments that he wants to run government like a business.
“I don’t have any problem with running government like a business where it applies,” Rios said. “But I think people sometimes forget that government is not doing what they’re doing to make a profit, (whereas) business is. Government is in place to provide services to its constituents.”
Miller and Smith stood firm on their original stances of not raising taxes.
“I believe that raising the primary property tax rate sends us in the wrong direction,” Smith said.
The primary property tax rate has long been an issue in Pinal County. Back in fiscal year 2012, when the rate was $3.99, Pinal County had the second-highest rate in Arizona. The current number, $3.79, puts Pinal at the third-highest rate in the state.
Miller and Smith have argued that the rate needs to be close to the state average or the median of the 15 counties in Arizona in order for Pinal County to be more competitive in economic development. The state average primary property tax rate is $2.17.
As for combined tax rate, which adds primary and secondary property taxes together, Pinal County is the fourth highest at $4.06.
Adding to the financial heartburn is the fact that many home values have dropped across Pinal County.
Miller said another reason why raising taxes is the “wrong move” is because people are bringing home smaller paychecks.
“The income has dropped not just in Pinal County but the United States of America,” he said. “I think we send the wrong message to the voters and the citizens when we raise the taxes at this point.”
Miller wasn’t concerned about the county not being able to provide services without a tax increase. He said not a single constituent had come to him with complaints about a lack of services.
Chase said she wasn’t happy about raising taxes but felt it was necessary considering the county’s financial woes.
“Nobody’s happy with some of our options, but (the voters) brought us here to make tough decisions, and we’re going to have to make them,” she said.
The board also gave Stanley direction to potentially implement fund sweeps up to $3.1 million from county departments. Stanley said only certain funds are eligible for the sweeps, with 80 percent of those potential funds coming from departments under the board’s control, while the other 20 percent could come from the Attorney’s Office, Clerk of the Superior Court Office, Superior Court and the Treasurer’s Office.