Truth in Taxation hearing offers brass tax on proprietor parcels
By Terrance Thornton | Digital Free Press
Municipalities across the Valley of the Sun are making final preparations and computations, as well as hosting the last rounds of public hearings prior to adoption of the upcoming fiscal year all-funds, and General Fund financial guidelines.
Scottsdale City Council, the local policymakers at the city of Scottsdale, is no different as the local governing board’s fiscal year begins July 1.
At its June 7 regular meeting, Scottsdale City Council hosted a “Truth in Taxation” hearing — one required by state law — to better understand the financial ramifications of planned tax levies onto the primary, secondary, and combined property tax rates for fiscal year 2022-23.
Scottsdale Budget Director Judy Doyle presented to City Council during the June 7 public hearing.
“The primary property tax levy is imposed by cities and towns for all general municipal purposes, while the secondary tax levy is only used to retire the principal and interest or redemption charges on bond indebtedness,” she explained of rights granted by state law.
Property tax is on the clock
Ms. Doyle explained cities and towns must hold public hearings on the proposed tax levies at least 14 days prior to the actual levy of the tax on primary and secondary property tax rates.
Across the Grand Canyon State, cities and towns use the primary property tax remits to help fund General Fund operations like essential services like police and fire departments. Secondary rates used for the sole purpose of paying back general obligations or “GO” bonds back through the municipal bond markets.
“For FY 2022-23, the city’s total proposed primary property tax levy of $36.42 million is an increase of $1.36 million over the current year levy of $35.06 million,” she said of the proposed primary tax levy, which is the result of tort claims against the city, a 2% statutory adjustment, and new construction.
“For FY 2022-23, the city’s proposed secondary property tax levy is forecasted to decrease $5.02 million from the FY 2021-22 adopted budget of $35.08 million to $30.06 million due to use of accumulated fund balance because of savings achieved through a general obligation debt refinancing. In addition, due to increased property values, the current secondary tax rate of $0.5042 is expected to decrease by $0.0941 to $0.4101 per $100 of assessed valuation in FY 2022-23.”
Ms. Doyle reports the combined tax levy — the aggregate of the primary and secondary levies — for this upcoming fiscal year will decrease approximately $3.66 million, going from $70.14 million this fiscal year to $66.48 million beginning July 1, 2022.
What does this mean for the Scottsdale homeowner?
Based on the combined rate, Ms. Doyle reports to City Council, an owner of a home with a Maricopa County Assessor’s real property assessed value of $100,000 will pay approximately $90.71 in municipal property taxes, applying the proposed combined property tax rate.
“The management of the combined property tax rate is included in the City’s adopted financial policies for debt management, which states that the combined tax rate will not exceed $1.50 per $100 of assessed value,” Ms. Doyle said of financial tenets at City Hall, 3939 N. Drinkwater Blvd.
Scottsdale City Council, at 5 p.m. Tuesday, June 21, will host a public hearing on a final vote to adopt the proposed property tax levies to go into effect the first day of fiscal year 2022-23.