LB - Orthopaedic Specialists of Central Arizona

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home : latest news : regional February 7, 2016

10/11/2012 11:57:00 AM
Prop. 117 seeks to limit increases in property valuation for taxes
Yes on 117 donors:
• National Association of Industrial and Office Properties Arizona Chapter: $27,000

• Arizona Tax Research Association: $20,000

• Arizona Cattle Feeders Association: $5,000

• Cox Arizona Political Action Committee Fund for Effective Leadership: $2,500

• Total: $54,500

Source: Arizona Secretary of the State's Office

By Melanie Yamacuchi
Cronkite News Service

Kevin McCarthy, president of the Arizona Tax Research Association, which is leading the campaign for Proposition 117, said many homeowners suffered as property values surged but property tax rates didn't necessarily adjust.

"It's going to slow down the surges in property tax revenue that are associated with the market swings," said McCarthy, whose group advocates for government efficiency.

However, Lea Marquez-Peterson, president and CEO of the Tucson Hispanic Chamber of Commerce, said Prop. 117 could interfere with Tucson's ability to provide core services.

"We feel that tax reform is needed," Peterson said. "If this is something that would impede our local government in doing their job, this wasn't the answer."

Lynne Weaver, a Phoenix resident leading an effort to limit property taxes much like California's Proposition 13, said Prop. 117 wouldn't do anything to prevent taxing districts from raising tax rates.

"Prop. 117 does nothing but add more distortion to the system, and it does nothing to limit your property tax bill," Weaver said.

Weaver's plan, which she hopes to get on the 2014 ballot, would roll back property values to what they were in 2003, cap the tax rate at 0.5 percent on residential property and 1 percent for all other real property. It would limit valuation increases to 2 percent a year.

Supporters of Prop. 117 argue that it would simplify Arizona's property tax valuation system, one of the most complicated in the nation. Since 1980, property owners have been assessed on two taxable values: the full cash value - or market value - and limited property value - or secondary value.

Full cash value is used to compute secondary taxes ranging from bonds to special districts for services such as fire and flood control. Limited property value is used to compute taxes for maintenance and operation of school districts, cities and counties.

The limited property value can grow by 10 percent each year and, during a real estate boom, every three years by 25 percent of the difference between the two values. The problem, McCarthy said, is that the full cash value has no limitation on annual growth.

McCarthy said Prop. 117 would simplify the system by creating a single valuation that would increase by no more than 5 percent annually.

"It's going to provide a level of certainty that currently doesn't exist," he said.

A group called Yes on 117 registered with the Arizona Secretary of State's Office received $54,500 in contributions, including $27,000 from the National Association of Industrial and Office Properties Arizona Chapter and $20,000 from the Arizona Tax Research Association.

A group called Truth & Concerns on Prop. 117 registered with the Secretary of State's Office but had filed no financial reports.

Edward Perkins, a policy analyst for Arizona State University's Morrison Institute for Public Policy, said the crux of the Prop. 117 debate is whether or not it would lower property taxes. He said he wasn't so sure it would because taxing districts could still raise tax rates.

"If people did their homework on this, this probably won't change things a great deal in terms of property tax bills, but they may perceive it to," Perkins said.

Related Stories:
• Prop. 120 would declare state sovereignty over resources
• Prop. 116 supporters say lower taxes on business property would spur hiring

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Reader Comments

Posted: Monday, November 5, 2012
Article comment by: Kinda Taxed. ..

•PROP. 117
= UNINTENDEDCONSEQUENCES. DANGEROUS EXPERIMENT TINKERING WITH ARIZONA’S 100-YEAR-OLD CONSTITUTION - Even the lobbyist proponents who support Prop. 117 concede this: It won’t guarantee lower tax bills…except for developers, as the burden will shift away from their higher-appreciating properties and onto homeowners like you. Prop. 117 is a dangerous experiment, radically changing a system enshrined in our Arizona Constitution that has served us for 100 years. Changing the Constitution’s requirement that property taxes “be uniform upon the same class of property” will legalize unfair and inequitable taxation.

Posted: Monday, November 5, 2012
Article comment by: Just A Tax ....

Limits that constrain changes in assessed or appraised value of property may appear to provide control but actually distort the distribution of the property tax, destroying property tax equity and increasing public confusion and administrative complexity. Owners whose properties are increasing in value more rapidly than the permitted rate of increase (say, 5 percent) receive a windfall at the expense of those whose properties are decreasing in value or are increasing at lower rates. In effect, valuation increase limits result in lower effective property tax rates for owners of desirable property and higher effective property tax rates for owners of less desirable property. Similarly, when state funds are distributed to school districts or other taxing jurisdictions based on taxable property value (indirect equalization), funding will tend to shift from poorer areas to wealthier areas with rapid appreciation—an illogical and undesirable result. Legislators and the public should be made aware of the inequities resulting from valuation increase limits and be actively discouraged from pursuing such limitations. Any other control is preferable.

Posted: Monday, November 5, 2012
Article comment by: Just Taxed ...

•PROP. 117 IS AN UNFAIR TAX SHIFT FROM LARGE PROPERTY OWNERS TO MIDDLE-CLASS HOMEOWNERS: Prop. 117 opens up a big loophole: It only caps appraisal values. That means governments can still increase the tax rates to make up the lost revenue, but it changes who PAYS. Disguised as reform, this is a massive TAX SHIFT away from higher appreciating property owned by wealthy developers onto homeowners in medium and low-income neighborhoods.

Posted: Wednesday, October 17, 2012
Article comment by: Been Taxed !

Prop 117 is a Regressive, Trojan Horse Proposition sponsored by ATRA Lobbyist for the Big Boys. Google Property Value Limits to see the Independent Studies that say value limits only provide a WINDFALL to the most desireable properties in the state.

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LB - Orthopaedic Specialists of Central Arizona

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