8/23/2012 1:03:00 PM Letter: Prop. 117 will
Lynne Weaver’s characterization of Proposition 117, of which I was the prime sponsor in referring to the ballot, was inaccurate on a number of counts and begs for a rebuttal. While I can appreciate Ms. Weaver’s frustration in her repeated failures to gain support for her version of California’s Proposition 13, she damages her credibility by suggesting that Proposition 117 is not good for property taxpayers.
Proposition 117 received overwhelming bi-partisan support in the Legislative because it is a well crafted reform that will simplify and stabilize Arizona’s overly complicated property tax system. Arizona’s current system uses two taxable values, one of which has no limitation in annual growth. Prop 117 simplifies the system by moving to a single limited value. More importantly, the annual growth in that single limited value will be capped at 5 percent.
Ms. Weaver suggests that capping the annual growth in taxable value to 5 percent won’t benefit taxpayers. She would be hard pressed to convince the thousands of Arizona taxpayers that were exposed to huge tax increases during the real estate boom in the last decade. In fact, when Arizona homeowners were receiving 60 percent increases in their taxable values from county assessors across the state in 2007, more than 140 jurisdictions failed to decrease their tax rates. For example, homeowners in the City of Phoenix experienced a 64 percent increase in their secondary taxes paid to the city in just one year! A 5 percent limit on annual valuation growth will protect taxpayers from local governments looking to profit from a surge in the real estate market. No longer will elected officials be able to hide behind the shell game that they didn’t raise taxes because they didn’t increase the tax rate.
Lastly, Ms. Weaver asserts that the Arizona Tax Research Association (ATRA) is a lobbying organization that isn’t interested in limiting your taxes. ATRA’s staff are in fact registered lobbyists and as the current chairman of Senate Finance Committee, I am very appreciative of ATRA’s advocacy for taxpayers at the Capitol. Interestingly, Ms. Weaver criticizes a bill from last legislative session (HB2405) that would have doubled school district debt capacity. A little research on her part would have revealed that ATRA led the opposition to that bill and successfully helped kill it.
As someone who has studied property taxes for many years, I can tell you that no system is perfect. However, Arizona’s property tax system will be much improved with the passage Proposition 117. I strongly encourage your support of Proposition 117.
Limits that constrain changes in assessed or appraised value of property may appear to provide control but actually distort the distribution of the property tax, destroying property tax equity and increasing public confusion and administrative complexity. Owners whose properties are increasing in value more rapidly than the permitted rate of increase (say, 5 percent) receive a windfall at the expense of those whose properties are decreasing in value or are increasing at lower rates. In effect, valuation increase limits result in lower effective property tax rates for owners of desirable property and higher effective property tax rates for owners of less desirable property. Similarly, when state funds are distributed to school districts or other taxing jurisdictions based on taxable property value (indirect equalization), funding will tend to shift from poorer areas to wealthier areas with rapid appreciation—an illogical and undesirable result. Legislators and the public should be made aware of the inequities resulting from valuation increase limits and be actively discouraged from pursuing such limitations. Any other control is preferable.
Posted: Sunday, September 30, 2012
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Sen. Yarbrough I'm not convinced that this is necessary or beneficial legislation, My property tax assessment went down over $15000 this year over last year, I would have thought that this would have lead to a greatly reduced property tax. The reduction from last year to this year was a grand total of $2 dollars, I would not call that much difference. You need to cap the increase of the tax, because the assessment is irrelevant compared to the tax