ARIZONA DAILY STAR: Sun., Oct. 27, 2007

Property taxes may move into suburbs

By Aaron Mackey

Slowing growth means fees, sales taxes won't be enough

Like builders erecting houses for incoming families, Tucson's suburbs have spent the last quarter-century preparing a home for future residents. Officials in Marana, Oro Valley and Sahuarita built roads, developed retail centers and planned for the future. To create the roads, sewers and parks towns need, officials counted on new residents to pay more taxes and fees.

But the towns have been carried away by the growth, experts say, with 10% to 38% of revenue they rely on for infrastructure construction and improvement coming from development permit fees, construction sales tax and impact fees, an Arizona Daily Star analysis found. That growth model isn't likely to continue — home construction permits for the towns are at their lowest point in five years. And, eventually, growth will slow to a point where it won't be able to pay for future needs.

That could happen at precisely the point at which the towns need more money. Like an aging house, the millions of dollars in improvements occurring throughout Pima County today will eventually need to be fixed.

Without growth to count on, local governments may need to consider everything from creating better jobs and diversifying revenue sources to instituting the very things the towns brag about not having: property taxes.

The current approach to urban planning works fine, as long as there are thousands of new residents and a red-hot housing market. But with the bottom dropping out of the housing market, now, more than ever, the flaws in that thinking are beginning to show, said Rob Melnick, director of Arizona State University's Morrison Institute for Public Policy, which specializes in urban-planning issues.

FULL STORY: http://www.azstarnet.com/allheadlines/208610