KINGMAN - The Board of Supervisors approved both the 2012 county budget and a 2 percent increase in primary property taxes Monday. While the atmosphere was tense, the crowd of about 70 people was calmer than a previous meeting the Board held on the issues on July 18.
After listening to around 20 people speak out against the tax increase Monday, County Manager Ron Walker asked the Board if he and County Finance Director John Timko could explain a few things about county taxes and the budget.
"We've listened to a lot of citizens this morning, and I think some of them have been misinformed about things," Walker said. He agreed that the change in the tax rate from $1.46 to $1.81 was a rate increase of about 24 percent, but the taxes people would pay would not increase by 24 percent, he said.
The county's tax revenue is capped by a voter-approved initiative that passed in 2006 at 2 percent per year plus new construction, Walker said. The county would only net a 2 percent increase in tax revenue by raising the tax rate, he said.
Walker also pointed out that this was only the second tax increase the county had asked for since 2006. The first increase came in 2009, when taxes were increased from $1.26 to $1.46 per $100 of assessed value. The second increase was from $1.46 to $1.81 this year.
Under the law, the county can only take in 2 percent more in tax revenues than it could the year before, Walker said, which means that when property values go up, the tax rate drops and when values go down the rate increases.
"We would love to 'just say no,' but the board took a statutory oath to fulfill its duties," he said, echoing a comment from an earlier speaker. The county also has to provide services mandated by the state and federal governments and can't remove funding from these programs. The rules are set by the Legislature and only the Legislature can change them, Walker said.
"We've already cut the operating budget and taxes," he said. The county will take in $4 million less in taxes this year, with the county's secondary taxing district rates, such as the library and flood districts, staying the same this year. People should see a 7 percent net decrease in the amount of taxes they pay to the county, Walker said.
"This is a balanced budget and it has been cut," he said.
Timko told the audience they had been misinformed by a small group of people who were using scare tactics. The increase in the tax rate was only a portion of their tax bill, he said. He echoed Walker's earlier statement about how the 2 percent tax increase would actually be a 7 percent decrease in taxes after the county's other taxing districts were taken into account.
He pointed to Schedule B in the county's tentative budget, which is posted online at www.mohave.az.us.gov. That budget worksheet shows that last year the county took in $59 million with a tax rate of $1.46. This year the county estimates it will take in $55 million with a tax rate of $1.81, Timko said. The drop in revenue is due to a nearly 18 percent drop in property values across the county and because the county is not changing the secondary taxing district rates.
"It's not a 25 percent increase, it's a 7 percent decrease," he said. "So, no, we're not raising taxes."
As for cutting things from the budget, the county has already done its best, Timko said. The county has around 777 funded positions, and 117 are vacant because the county doesn't have the money to fill them, he said.
"We've made significant cuts in this budget. Saying that we're not trying hard enough is an insult," Timko said.
There are more than 400 different funds in the county budget, and many are mandated state or federal programs, he said.
"The state makes the rules. Property taxes are the only significant tax the county has any say on," he said. The county's share of the State Shared Revenues is controlled by the state, as well as its share of gas, vehicle and sales taxes. The Legislature has taken some of the money from each one of those funds in order to pay for its own costs.
On top of that, the Legislature continues to shift the cost of some of its programs onto the counties, such as the salaries of the justices of the peace and the cost of treatment for prisoners at the state hospital. In July of next year, the cost of housing prisoners who have less than a year left on their sentence will be the county's responsibility. The state has also demanded more than $1 million in county contributions because Mohave County is the fifth largest county in the state, Timko said.
The county will never see the increase property tax revenue because the state will take it before it even reaches the county's coffers, he said.
"I'd like to tell the Legislature no. I'd love to just say no, but they'll just take it anyway," Timko said.
Resident Denise Bensusan told the Board that the tax increase and the Board's actions amounted to taxation without representation. The overwhelming response from the public has been negative, but the Board continues to push through with the increase, she said. People are struggling to hold on to their property.
She said she understood the Board's need to for revenue, but why couldn't the Board do a 1 percent increase instead of a 2 percent.
Former Mohave County Planning and Zoning Commissioner Bill Abbott also spoke out against the tax increase. The county has other ways of generating revenue, he said.