Arizona Tax Revolt seeks to roll back property taxes

KINGMAN - The Arizona Tax Revolt will be filing a second property tax reform initiative soon, said Chairman Marc Goldstone.

"There is no justification for why property taxes should go up that much," he said, referring to the rapid increase in property taxes over the last few years.

The new initiative deals with the property values that are used to calculate property taxes. If it makes the ballot and is approved by voters in November, this initiative would reset the property values used by taxing districts to calculate taxes back to 2003 levels. Goldstone will need 230,047 signatures for each initiative in order to get them on the ballot for November.

Currently, the county and the state use 1 percent of the market value of a home in order to calculate property taxes. School, fire, water, sewer, etc., districts use full market value of a home to calculate taxes.

The valuation initiative would lump all the taxing entities under one umbrella and force them to use 2003 property values to calculate the amount of taxes they could charge to each property owner. It also limits increases in property values to 2 percent a year. The organization picked 2003 because there wasn't a major increase in property values that year, Goldstone said.

The idea, he said, is to eliminate the effect the real estate market has on property valuations used to calculate taxes. If approved, the proposed initiative would go into effect in 2010.

The delay in filing the new initiative is allowing the organizations' lawyers one last look at the proposal, he said.

The organization filed its first initiative last week. It dealt with rolling back levies for all taxing entities in the state.

Goldstone said the initiative would calculate the three-year average of the actual tax levies for a tax district and then reset the levy to that figure.

However, there's a catch. The three-year average rollback method would only be used for those tax districts that limited their levy increases to 2 percent plus any growth in the area. Any district that's levied taxes increased by more than 2 percent would have their levy values reset to 2005 levels.

The idea is to encourage taxing districts to watch their budgets now and limit the amount of taxes they ask for, Goldstone said. Governments should still be able to get the funds they need from the levies, he said.

The levy initiative also gives taxpayers the right to petition their local governments to lower tax levies. If the petition is found valid and the tax entity does not lower the tax levy, the petition can be put on the November ballot. If the measure gets approved by a majority of the voters in the election, then the levy must be lowered. The levy cannot be lowered more than 20 percent.

Any levy increases over 2 percent must be approved by a two-thirds vote of the electors in an area during a November election.

Annual levy increases will be attached to the Phoenix-Mesa Consumer Price Index or the same rate of inflation in the cost of household goods in the Phoenix-Mesa area.

Not included in the two tax initiatives are improvement districts and bonds. Bonds and improvement districts are usually used to pay for improvements related to growth in an area, such as new roads, sewer and water systems. Goldstone said the organization did not want to limit growth in the state.

The two initiatives were originally one large initiative. Goldstone said the organization's lawyers suggested splitting the initiative into two parts because of its complexity.

"A lot of thought went into this," he said. The organization was very careful not to shift the tax burden onto another taxpaying group like businesses.

Goldstone said he expects to see the state Legislature attempt to keep the initiatives off the ballot by meeting the group halfway with a proposal to drop property valuations. He doubted the Legislature would also attempt to limit levies as well.