At the front of every Pima County Board of Supervisors meeting is a call to the audience.
It can get pretty funky during these sessions dominated by accusations of collusion with the United Nations. The re-population of America by them people and, like this week, concerns about tax increases with reference to non-existent 19 percent inflation.
Local election denier Tim Laux provided a pretty representative chinwag at the board, during Tuesday’s meeting.
“Every
time I listen to this supervisor meeting on YouTube or come down here I
feel threatened.” He then went around the horn and called Adelita
Grijala a communist, accused Rex Scott of wanting to take their guns
away and declared an absent Matt Heinz wanted to give everyone a “killer
jab” (spreading tired misinformation about the coronavirus vaccine). Then he said because Sylvia Lee was appointed not elected, she
shouldn’t have a vote. That was four seconds before saying we don’t live
in a democracy because presumably elections shouldn’t matter.
Sometimes the Left gets involved over their pet local issues, like the war in Gaza.
Pima County Republican Party Chairman Dave Smith is pushing another line that has the people in a bunch. The Board of Supervisors was going to raise property taxes, he told us.
“You fail to understand government is force. You will increase our taxes.
You must. Yet the taxes don’t go for the public welfare. They don’t go
for the community … ” and then he went off on a winding dissertation about how the public is (I guess) his public and that sycophants in the media keep covering up for the board.
Man, I would love to comply and not be intellectually associated with people who say immigration is a U.N. plot. But Smith has sort of a point, whether he knows or not. It seems like whether taxes are going up or not the local GOP is going to take a page out of Donald Trump’s book and just say they are. Repeat a lie enough, everyone believes it. All’s fair in a war against demonic forces like me.
It’s just that Smith tapped into one of my standing gripes about Pima County going back decades. I’ve called what the county did a stealth tax hike. I can’t reverse course just because it would be fun to mock those who don’t know much about what they’re talking about.
Taxes go up, taxes go down
Let’s start with where I take issue with Smith. The Board of Supervisors did not – repeat, not – increase the tax rates above fiscal year 2023.
They approved the budget Tuesday and left the total county tax rate right at $5.1048 per $100 of assessed valuation.
Yet the county tax rate is made up of two parts.
There’s the primary property tax, which pays for daily operations and the board sets it as it chooses.
There’s
the secondary tax, which pays for special districts and county bonds.
The primary property tax increased from $4.0102 to $4.0990 per $100 of assessed valuation.
That’s a $.0888 per $100 of assessed valuation increase.
The secondary tax includes different components, like the Library District, the Flood Control District and debt service. The supervisors increased the first two by a smidge but debt service fell from $0.2200 to $0.1250.
Overall, the secondary property tax dropped .0888 per $100 of assessed valuation.
A wash. Your county property tax bill would be pretty much the same as last year — if your property value weren’t going up. The county can’t control real estate prices.
So the call to the audience provided nothing more than the
opportunity for loud-mouth cranks to manufacture another false claim
about Democrats, right?
Kind of. Sort of. Not really. Tax bills
are still higher than they would have been if the primary rate hadn’t been raised as the secondary rate fell.
That decrease in secondary taxes was entirely a function of retiring old debt. Pay off the credit card, the bill goes away.
Secondary tax dollars can not migrate over to daily operations and
pay for sheriff’s deputies salaries. State law forbids secondary taxes
to be used in a government’s discretionary “general fund.”
Primary taxes are raised and lowered at the board’s discretion.
Age-old burr
Technically and spiritually, the two taxes should operate independently. The board should set programmatic policy and then figure out how to pay for it or set the primary tax and figure out how to divvy up programs. Either way, they should leave debt service to finance people.
Well, Pima County has long not operated that way. Former County Administrator Chuck Huckelberry started the long pattern of asking supervisors to raise primary taxes a little less than the secondary tax would fall.
This was back when I was new at the Tucson Citizen and John Elway was still winning Super Bowls for the Denver Broncos. I remember calling then-Supervisor Raul Grijalva and saying “Heyyy, that’s not a tax cut!”
That’s how long this has been going on and it’s always been a burr in my saddle.
“Why drop the total tax rate when people are used to paying a combined rate of X? We’ll just goose up the primary tax a bit and still call it a tax cut.”
That way, every time a bond is paid off it’s an opportunity to raise the other tax.
No property owners are paying a higher tax bill. Absolutely not. They’re just paying more than they would have if the board took no action.
The price of entropy
I get why the county feels like it must adopt this “Paygo” approach to capital investments.
Voters have stopped approving bonds. They got shot down in 2015and 2018. “Screw the county. We’re sick of Huckelberry. He’s the head of Tucson’s establishment. Stick it to ‘The Man.'”
Unfortunately, the laws of physics don’t care about your feelings. Entropy is still a thing. Roads, air conditioning systems, squad cars, laptops and buildings move from an ordered state to a disordered state.
Stuff breaks. Needs fixing. Capital expenses are not optional for anyone in charge of hard assets. Unless we’re on a barter system, stuff costs money. The county can’t print money. It must tax. Therefore it’s only option is the primary property tax. If it can’t bond for these most basic (but pricey) fixes, then it must use those tax dollars to pay as they go.
So what the board says is “we’ll protect property owners from higher taxes and only raise operations taxes when the secondary rate falls.”
In fact, while the county board has been using the Paygo policy, the overall tax rate has fallen because it hasn’t used all the secondary tax capacity. The tax rate has fallen 45 cents per $100 of assessed valuation.
Rising tides lifts all taxes
Actually, there’s another way tax bills can increase and that’s
rising property values. In fact, the average tax bill in Pima County
will be $58 higher than this year entirely because of rising property
values. Assessed values are rising, as is personal net worth.
The argument could be
made that rising property values should be offset with lower tax rates.
That’s fine. It’s just not an argument people make for other kinds of
tax revenues.
The post-pandemic global inflation shock led to
higher prices and therefore better sales tax revenues in Arizona. There
wasn’t a giant clamor for lower sales tax rates. When lower income
people pay taxes, that’s just the way it is. When taxes affect higher
income earners and asset owners, stop the insanity.
Pima County is
not able to impose a sales
tax for operations. A unanimous vote of the board would be required and Republican Steve Christy won’t allow it because it would be political suicide in a Republican primary.
Board members would love a sales tax to diversify income. Historically, the board has pledged to cut property taxes
by a commensurate amount to the money raised by a sales tax.
Yes, the county collects a Regional Transportation
Authority tax but that money goes straight to the RTA. All the county
does is collect the cash.
Just do a bond, already
Here’s where I part ways with the board on the issue of Paygo.
Call it the good government geek in me. The primary and the secondary tax rates shouldn’t be linked.
Wanna raise taxes to pay for new services? Do that. Want to do it while the secondary tax falls, fine. The problem is what the county can’t say when they try a new bond.
Arguments for every bond question I’ve ever reviewed have gone like this: We’re going to do a very specific thing, and pay for it with a very specific tax that will go to nothing else but the thing you vote for. When the very specific thing is done, the very specific tax goes away.
Well, not anymore.
Now it can be argued that bonds set a new benchmark for taxes. They have done just that. Now, when the bonds are paid off, the board will just raise the property tax to fill in the gap.
Voters are used to paying X tax rate. So make them keep paying that or something close to it.
The Paygo scheme makes it harder to win the public trust so voters will approve bonds that are absolutely necessary. Paygo just isn’t going to raise enough money needed to maintain county services.
Here’s another problem. The county board today can scream until they’re hoarse that the extra primary taxes will only go to capital. Can’t some of these anti-tax types just say “well, if you want to pay for road repair, why not just get rid of the Pima Early Education Program?”
Yes, they can. They can even deploy the law of transitive properties to argue that a voter approved road bond will provide general fund capacity to pay for new Lefty programs.
The answer is to try to do an actual bond and do it right. Try an overabundance of outreach and even public opinion research. The Board of Supervisors must figure out how to win public support. Voters in school districts and other local governments right now are passing bonds and overrides with ease.
Yes, voters opinions of the economy are larded up with cognitive dissonance. On the one hand, they are convinced the economy is in the gutter and the whole system needs to be burned down. On the other hand, “Sure, I’ve got a few extra bucks for new schools. Happy to help.”
Winning approval to sell bonds means the county can do the work that needs to be done in the way it needs to be done. Bonds are better for a host of reasons, including the ability to use tomorrow’s dollars to pay today’s prices. They also solve cash flow problems because the bond buyers will provide big lump sums needed to do a lot of work fast.
So no one is going to go broke because “the county raised taxes” because the rate ain’t budging.
The extra $58 a year isn’t going to kill anyone or drive them into homelessness.