TUCSON CITIZEN:  Weds., June 13, 2007

$1.2B city budget passes; new fees stalled

by Eric Sagara

            The City Council voted to approve the city's $1.25 billion budget Tuesday, but it is still debating the details of a new set of impact fees that would pay for more police and fire stations.  The council decided to further discuss the new fees after hearing complaints from local builders during a public hearing Tuesday evening.

            Lori Lustig, government liaison for the Southern Arizona Home Builders Association, pointed out that under the current proposal the new fees would increase to account for inflation before they took effect.

            Council members will most likely discuss the issue during next Tuesday's study session meeting, said Andrew Greenhill, chief of staff for Mayor Bob Walkup. The council will vote on the fees at its July 10 meeting.

            The fees would be used to expand the city's police, fire and administrative infrastructure.

They would add $1,712 to the cost of a single-family home and could also be assessed on commercial development at a rate based on square footage.  The fees would be passed directly to buyers when they close on new homes, Lustig said.

            The Tucson Police and Fire departments will get more paramedics and police officers under next year's budget, which the council unanimously approved Tuesday.  The budget includes money to repair the heating and cooling system at the Tucson Convention Center.

            As part of the budget approval process, which began in early May with the first of several public hearings, council members are scheduled to set the property tax rate June 26.  The tax rate could drop as much as 9 cents per $100 of assessed valuation, a saving of about $18 a year on a $200,000 home. However, many taxpayers will still pay more tax than last year because of increases in property values.

            Primary property taxes account for only 2% of city revenue in its general fund. Other taxes and fees, including sales taxes, account for 67%, and state-shared revenues from sales, income and other taxes and fees account for the remaining 31%.