Pima County has filed a lawsuit against the state, saying a property tax increase that affects only residents living in TUSD is unconstitutional.
It’s the second time the county has sued the state over education funding used to pay for federally mandated desegregation efforts in Tucson Unified School District.
The suit filed jointly with TUSD on Monday says the state budget approved by Republican lawmakers and signed by Gov. Doug Ducey singles out some Pima County homeowners, who will see a hefty increase in their property tax bills.
At the heart of the issues is who will pay for the district’s annual multimillion-dollar desegregation budget.
The new state budget shifts the district’s desegregation funding from a primary to a secondary property tax, undoing a formula that has funded the court-ordered program for decades.
The shift in funding is critical. That’s because the state constitution limits primary property taxes that a city, county, school district and others can collect to 1 percent of a property’s full cash value.
Currently, the county offers homeowners credit for any taxes above 1 percent, and the state makes up the difference via “additional state aid” to the school district.
Secondary taxes — which are defined as bonds and overrides — are not included in that calculation and are not subject to the 1 percent cap.
The change means homeowners in TUSD’s boundaries would see a sharp increase in their tax bill of $126 per $100,000 of assessed value to cover those costs, according to county estimates.
“The State is obligated to pay $8,113,188.62 to Pima County for the benefit of TUSD as additional state aid for education,” the six-page lawsuit reads. It also asks that the state pay for court and attorneys’ fees.
Pima County Administrator Chuck Huckelberry said he is confident that TUSD and the county will prevail in the latest lawsuit, noting that the county successfully sued the state in a similar case.
In that case, a Maricopa County Superior Court judge sided with Pima County in a similar lawsuit, saying the state was responsible for the $7.4 million in education funding.
“This is the second time the Arizona Legislature has tried to shift the 1980 Constitutional State Aid to Education to local taxpayers. Their first attempt in 2015 failed when the county prevailed in litigation,” Huckelberry said. “This cost has always been the obligation of the state.”
Earlier this year, the TUSD school board authorized its attorneys to either sue Pima County — which collects property taxes — or the state.
Pima County Supervisor Steve Christy said he is glad that TUSD opted to partner with the county to sue the state.
“It makes sense to cut to the chase,” Christy said.
The change in the state’s tax codes was made in the waning days of the legislative session, Christy said, and was not thoroughly analyzed before signed into law.
“It was poorly written, poorly thought out and poorly executed,” Christy said.
Supervisor Sharon Bronson went a step further, hinting that the Republican-led Legislature was looking to politically punish Pima County. “Ultimately, the state Legislature is responsible for this,” Bronson said.
TUSD board member Mike Hicks said he hopes state lawmakers will reconsider the changes it made to the tax structure.
Hicks said he supports the legal action, saying Pima County taxpayers are being unfairly singled out.
Ducey’s office had no comment on the lawsuit, citing a policy not to discuss pending litigation.