By Patrick McNamara for The Arizona Republic
Pima County sued the state June 8, claiming its new budget illegally forces millions of dollars in education spending onto county taxpayers.
The county’s request for special action in Arizona Supreme Court asks justices to undo the shift of more than $45M in costs back to counties in Gov. Doug Ducey’s budget plan approved by the Legislature in March.
By law, the combined primary property taxes assessed throughout each county are capped at 1 percent of a home’s cash value. Since 1980, the state has provided extra funding to school districts for the amount that combined tax rates go above the cap.
Under the new budget, however, the state would now pay no more than $1M per county in additional state aid for education and instead would force local governments to cover the costs.
That could cost Pima County taxpayers an extra $18M and force the county to transfer nearly $9M of that to Tucson Unified School District, county officials estimate.
Pima County’s primary property tax rate is $4.27 and TUSD’s primary rate is $6.80. Together, the two primary rates exceed the cap at a total of $11.07.
The county makes two main legal arguments in its request for special action.
The first argument contends the state violated separation of powers clauses established in the Arizona Constitution because the Legislature essentially delegated taxing authority to the state’s Property Tax Oversight Commission.
Commission members are appointed by the speaker of the House, Senate president and governor, and they are tasked with ensuring fair administration of property tax laws.
Pima County’s suit also argues the law violates equal protection guarantees by taxing property owners in one part of the county and transferring the funds to a government to which the property owners have no connection.
Pima County isn’t the only area likely to feel the effects of the law change.
In Pinal County, supervisors have to contend with an added $2.8M cost as a result of numerous school districts and a community college district pushing the collective primary property tax above the 1 percent threshold.
While Pinal doesn’t plan to file a lawsuit, it does intend to lend support to one or more of the various legal filings expected in support of Pima County.
Ducey has supported the law as a needed cost-cutting measure for the state. His office is reviewing the lawsuit, spokesman Daniel Scarpinato said.
If the court does not act, the law is scheduled to go into effect in July. County officials say they will file the lawsuit in Superior Court if the state’s high court declines to review the case.
Read more at The Arizona Republic