July 14, 2007
What a week...
We have filed the Arizona Tax Revolt – Property Tax Levy Rollback initiative and are hard at work finalizing the second measure. I have been asked a lot of questions about how the Levy Rollback measure will lower our taxes. So what better way but to share those questions and answers with you:
Q) Why is a constitutional amendment needed and what will it do to lower my property tax bill?
A) The state constitution lays the foundation for our current property taxation system. It was written by government to assure their ability to tax our property in many cases without limit. The rollback provisions within this constitutional amendment reverse the recent tax increases that for many have far exceeded personal income growth and the ability to pay. The measure also establishes a 2% maximum annual levy increase, plus the tax attributable to and paid for by new growth and any amounts approved by a 2/3 vote in a November election. Taxpayers have budgets and now to prevent excessive taxation each taxing entity will have levy limits, (portion of their budget paid by property taxes) no more blank checks. With levy limits it will be easier for taxing entities to cut out waste and inefficiency than to raise property taxes.
Q) In 2006, we voted on and approved Prop 101 referred by the Legislature which sounded a lot like this measure. Why is another change necessary?
A) Prop 101 excluded all taxing entities other than counties, cities, towns and community college districts from levy limits. We are merely eliminating this loophole to include all taxing entities under these wise levy limits.
Q) I have heard that this measure may actually lower our property taxes in 2007 and 2008 even before we can vote on the measure in November 2008, how will this work?
A) Because so many property owners (regardless of the property classification) have seen excessive property tax increases the measure was architected in a way that provides an incentive of a lesser levy rollback for taxing entities which choose to adopt the provisions of this measure. In this way the consequences of a more severe levy rollback in 2009 can be avoided and the taxpayer’s benefit by lower tax increases NOW.
Q) Will this hurt my local school or fire district?
A) Taxing entities like school and fire districts that manage their finances without taking advantage of their current “blank check” authority in 2007 and 2008 will hardly be affected, yet other taxing entities that do not show such restraint will face a larger budgetary correction.
Q) Will this measure permit additional funds if needed by a taxing entity?
A) Absolutely, nothing in this measure prevents the people from taxing themselves. However since a property tax increase is effectively a mortgage on our property and to assure that the increase is needed and supported by the taxpayer’s we require a 2/3 vote in a November election for approval.
Q) Will all property owners benefit from this measure?
A) Yes. The savings will be equal by percentage for all properties (regardless of class) having the same set of taxing entities. In other words all those properties in the local area.
Q) Much of the measure talks about limits on tax increases. Is there a way that the voters can require lower levy limits if a taxing entity for example was not spending our tax dollars wisely?
A) Yes. For the first time the voters will be able to petition for and reduce the levy limit lowering the taxing ability of a particular taxing entity. This will help to assure accountability as the voter/taxpayer will have the last word about property taxes.
Q) If we experience an economic downturn will taxes continue to increase by 2% per year like in the good times?
A) Not necessarily. The 2% increase is a maximum. This levy adjustment is tied to the Consumer Price Index which means that the 2% increase could actually be a decrease or an increase of less than 2%. We did this so that government revenue will share in the good times as well as the bad.
Q) There has been talk of imposing a statewide property tax. Will this measure protect the taxpayer by giving us a say in such matters?
A) Yes, approval of the initial levy of this new taxing entity will require the separate approval of 2/3 of those voting on the issue in each county.
I trust this has answered at least a few of your questions. If not just reply and I will try to answer your questions or address your concerns.
Your Humble Tax Fighter,
Marc Goldstone, Chair.
Arizona Tax Revolt
(602) 388-8833
