Local officials called the state budget proposed by Gov. Doug Ducey and Republican lawmakers “an attack on Pima County” due to a provision that would significantly hike property taxes for many Tucson homeowners.
The proposed state budget, which lawmakers debated late into the night Wednesday, would force local property owners to pony up funding that the state is now paying to cover the cost of Tucson Unified School District’s desegregation tax.
The provision would shift more than $16 million in taxes from the state to the county by reclassifying desegregation property taxes from a primary levy to a secondary levy . Local primary property tax levies are capped at 1 percent of full value, and the state picks up any costs beyond that. Secondary taxes have no cap.
For TUSD’s desegregation tax, the state cost is about $16.4 million, according to Pima County Schools Superintendent Dustin Williams.
Williams called the switch an “attack on Pima County” and said if lawmakers approve the shift, it will cost homeowners in TUSD’s boundaries about $240 extra on their tax bill per $100,000 of assessed home value — up from his original estimate of $126 in additional taxes. The provision will affect roughly 100,000 homes, he said.
“That’s going to raise taxes. So the governor has gone against his word of not raising taxes,” Williams said.
Williams noted that Pima County isn’t the only jurisdiction affected, but that others, like Maricopa, received a special line item in the budget to cover the cost of the shift.
Williams said he’s used to the Legislature launching attacks on Pima County and TUSD, and he tries not to get emotional about it.
“But this one is kind of hard, especially as a native Tucsonan, seeing a blatant attack on our county,” he said.
TUSD Superintendent Gabriel Trujillo noted the irony that many of the homeowners who will be impacted by the tax shift will hit teachers who own homes in the district — the same teachers the budget aims to help.
“It’s really beating up and robbing Peter to pay Paul,” Trujillo said.
He said he hoped Republican lawmakers reject the proposal on principle.
“We’re hearing from our lobbyist that there is some concern among the Republican ranks — not because it’s TUSD, not because they’re wildly supportive of TUSD or Pima County — but ideologically. The concept of raising taxes in this way, outside of a ballot measure, in an administration that has vowed to not raise taxes,” he said.
Lawmakers debated the budget late into Wednesday night, but appeared unlikely to strip the provision from the budget as of the Daily Star’s deadline.
Ducey spokesman Daniel Scarpinato said the governor doesn’t think of the proposal as a tax increase.
While he acknowledged it would raise the amount of property taxes TUSD residents pay, he said the overall tax rate won’t change — only who pays for those taxes will.
“The Legislature sees this as an issue of fairness for all taxpayers no matter where they live. … Taxpayers in other counties are subsidizing this because they’re paying taxes that then pay for this amount that (Pima County) goes over the cap,” he said.
Other counties won’t see their taxes decrease because of the proposal, but they will see benefits from the changes in the form of higher teacher pay and other budget proposals paid for by the savings, he said.
Scarpinato said the provision wasn’t a priority of the governor, but of Republican lawmakers who Ducey negotiated with. He said he didn’t know why Republican lawmakers gave a subsidy to Maricopa County.
“I would encourage you to talk to the House of Representatives about that,” he said.
Republican Reps. Todd Clodfelter, Vince Leach and Mark Finchem, all representing Pima County, did not return calls for comment.
But Republican lawmakers have made an almost annual exercise of attempting to eliminate or shift costs of TUSD’s desegregation levy onto local taxpayers.
Trujillo sent a letter to lawmakers Thursday pleading with them to reconsider, and noted that the provision was thrown in at the last minute with no local input.
“By implementing this tax shift of the desegregation levy to only local taxpayers, the Legislature will be consciously damaging the very people that it says it wants to help,” he wrote.