Property values, property taxes going up in Mohave County
Assessment calculations simplified due to new Arizona law
KINGMAN - Property tax bills will be coming in the mail in the coming weeks and will reflect the new rates and laws changed for 2015.
The good news: On average, the full cash value of residential properties in Mohave County is up 14.7 percent.
The not-so-good news: Even with new tax laws in place this tax year, 92 percent of residents in the county will see an increase in property taxes, with an average 11 percent increase from the year before.
Believe it or not, how those property taxes are calculated are simpler than in the past due to changes in Arizona tax law implemented for 2015. Knowing the rates in your given area and how your taxes are calculated may help lessen the sting when your bill comes in the mail this fall.
Proposition 117 was on the 2012 general election ballot and passed in Arizona with 56.6 percent of the vote. The proposition called for an amendment to the Arizona Constitution to cap annual increases in values of real property used to calculate property taxes at 5 percent.
There are two values assessed by the Mohave County Assessor's office used in the calculation of property taxes: the full cash value and the limited property value. The full cash value represents the market value of a property, where as the limited property value represents a value derived from the greater of two values: either a 10 percent increase to the previous year's limited property value, or an increase equal to 25 percent of the difference between this year's full cash value and last year's limited property value.
The purpose of limited property values is to help combat steep hikes in property taxes due to spikes in property value. Those limited property values have a cap on how much they can increase in a given year.
It helped somewhat, as certain taxing entities were limited to taxing that limited property value. However, according to Mohave County assessor Ron Nicholson, a "large portion of the tax bill was calculated on the full cash value" and that full cash value has no cap on how much it can increase in a given year. The county, school districts, and the community college are among those entities that could tax the full cash value of a property.
For residents, this could make predicting property taxes difficult from year to year. Nicholson said that even if tax rates stayed the same, their taxes could go up or down significantly, especially those taxes tied into the full cash value.
Because proposition 117 dictates that the annual increase in values that are taxed cannot exceed 5 percent, and because full cash value must reflect market value per Arizona law, three changes needed to take place: all taxing entities could only place their tax levies on the limited property value, that limited property value cannot increase by more than 5 percent in a given year, and that limited property value cannot exceed full cash value.
That fundamental change in taxing structure heavily influenced governing boards across the state when it came to discussing tax rates.
"Taxable value for the county decreased because of the move to limited tax value. Full cash values increased overall, slightly," said Nicholson. "This whole thing has been a challenge to taxing jurisdictions to make even the same budget as last year."
Taxing entities: How did they fare?
Taxing entities are divided into two different rates: the primary tax rate and the secondary tax rate. In 2014, the primary tax rate would apply to the full cash value, while the secondary tax rate would apply to the limited property value. In 2015, both rates will apply to the limited property value only.
For the purposes of this article, the Kingman area applies to property owners who would send their children to school in the Kingman Unified School District.
The Kingman area has four taxing entities that, together, add into the primary property tax rate: Mohave County, the State School Tax Equalization, Mohave Community College, and Kingman Unified School District No. 20.
In addition, there are either six or seven taxing entities that culminate into the secondary tax rate: the Fire District Assist Fund, Mohave County Library District, Mohave County Flood Control District, Mohave County TV District, Western Arizona Vocation Education District (JTED), and KUSD No. 20 School Bonds.
The seventh entity is the fire district covering the area in which your property lies. For properties in the Kingman city limits, the fire department falls under the city of Kingman and is funded via sales taxes.
In general, most of the taxing entities saw an increase in the rate they assessed. This doesn't mean that they saw an increase in their actual direct levy.
Kingman Unified School District No. 20 increased its rate from 4.45 percent to 4.88 percent, but will realize a $324,115 decrease from 2014. Pinion Pines Fire District increased its rate from 3 percent to 3.25 percent, but will see an $85,015 decrease from last year.
The two largest fire districts, Northern Arizona Consolidated Fire District and Golden Valley Fire District, increased their rates to 3 percent and 3.25 percent respectively. Golden Valley Fire is seeing an extra $107,006 and NACFD will see an extra $17,167.
The Mohave County Board of Supervisors' claim that the rate increase to 1.97 for Mohave County was "revenue neutral" stands true. While the county will get an extra $1.76 million from the property tax levy this year, they offset that by shaving off $1.92 million from the library district and $892,794 from the TV district.
What will your tax bill look like?
Those rates will appear individually on your tax bill, but it's often the number at the end that concerns taxpayers. How much will you pay this year compared to last year?
In general, taxpayers can expect to pay a little more this year due to an increase in full cash values. Of the 65,535 residential property owners in Mohave County, 89 percent of residents saw their full cash value increase, with an average increase of $11,773. However, due to the implementation of Proposition 117, the limited property values on average only increased by $3,078.
That will translate to a lower bill than you would have if proposition 117 was not enacted.
However, it is completely dependent on your property's value and how much it increased or decreased this past year. Increases in cash value are almost completely correlated with increases in limited property value, but the increase in limited property value is capped at 5 percent from the previous year.
Looking at the following taxing entities at left, we will use the average full cash value and limited property value from 2014, as well as the full cash value from 2015 to calculate what your tax bill could look like in 2015. Your individual tax bill may be different.
These don't include a deduction from the state for education, which last year was about 22 percent of the primary tax levy. The numbers for this year weren't available by publication deadline.
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