FAQ
Here are some answers to the questions we often are asked:
Q: Why do we need an initiatiative?
A: Some of our elected officials have introduced legislation that would limit property tax increases and protect property owners. Unfortunately, they have been unable to get the necessary votes to pass the legislation. An initiative goes straight to the citizens and allows them to make the desired changes in our laws.
A: The initiative rolls back valuations to 2003 or purchase price after December 31, 2003, caps total tax at ½ of 1% for residential property and 1% for commercial property and land, limits increases to 2% per year, and eliminates exceptions to these limits.
A: The initiative will be on the ballot in November of 2010 and if passed will go into effect in 2011.
A: With property tax increases limited to 2% per year, your landlord will only need to pass on that small amount to you through a rent increase.
A: No, your tax could increase by 2% per year. When property is sold, the new purchase price resets the basis for taxes due which could be higher than what the previous owner paid.
A: The current complex system of property taxation makes an average tax reduction per property owner difficult to determine. Over the past several years, valuation increases had wide disparities throughout the state and even within communities.
Q: How will this impact fire and police departments? A: Public safety usually takes top priority in municipal budgets and should not be affected by property tax limitations.
Q: How will this impact school districts? A: Schools have received windfall revenues as a result of valuation run-ups over the past several years. For example, the Maricopa County Assessor’s Office reports its school districts on average increased their tax levy limits by 15.2% for primary tax revenues and a 36.8% for secondary tax revenues in one year from 2006 to 2007. Prop 13 Arizona will for the most part restore school financing to where levels would have been without the valuation run-ups.
A: According to The Wall Street Journal, every $100. increase in your property taxes reduces the value of your home by $1,200.
A: That is correct. After Prop 13 Arizona is implemented, there will be no need to speculate about home valuations.
Q: Will Prop 13 Arizona bring new businesses into the state? A: That is quite probable. We currently have the 4th highest commercial property tax rates in the nation which hurts our ability to attract new businesses. Reducing the rate to 1% makes us competitive with other states including California which has had a 1% rate for the past 29 years. Nevada has a property tax reduction initiative on the 2008 ballot. After its passage, Nevada will have a major competitive edge over Arizona in attracting new businesses
Q: Will this impact the state’s economy? A: Yes, Prop 13 Arizona will have a positive impact on the state’s economy. After California passed Prop 13 it kicked off 12 years of unprecedented growth and economic prosperity in their state. Businesses and homeowners want to budget and plan for their tax liabilities and Prop 13 Arizona gives them that ability.
Q: Is a 2% annual increase enough money for government? A: Many of our citizens get less than a 2% income increase per year. Arizona is a retirement state. Those on fixed income receive only cost of living increases in their Social Security checks and no increase in their pension checks. Only government retiree pension checks offer cost of living increases. Government budgets need to stay in line with citizen’s income. California’s Prop 13 has resulted in a 7.5% average annual increase in property tax revenue over the past 30 years.
Q: How many signatures are required for the initiatives to qualify for the 2010 ballot? A: The initiative must have 230,047 valid signatures of registered voters in the State of Arizona.
Q: What is the current formula to determine property taxes?