INSIDE TUCSON BUSINESS: Mon., Feb. 25, 2008
Come on down, lower property valuations
David Hatfield, Publisher
I'm looking forward to a card I'm supposed to get in the mail from Pima County Assessor Bill Staples this week. On Wednesday (Feb. 27) his office will mail out notices of property valuations for tax purposes. The value of my home better go down. Remember, this is a case where you want your property value to go down because what the assessor says your property is worth is what it's taxed at.
Of course, the goofy way Arizona figures out property taxes means any valuation reduction on this week's notices won't manifest itself until tax bills are mailed out in September 2009 - yes that's 18 months from now.
According to Staples , I probably will see a drop in the full-cash value of my home and so should the majority of homeowners. Some will see it go down 10 percent or more. The values this time around are derived from sales that took place from mid-2006 to mid-2007.
Considering the way things have been going, that means values should drop even more a year from now. In the meantime, there will be the sideshow watching the government bureaucrats who lead our elected officials producing budgets that will require more tax revenue. These are the folks who, each year, figure out a way they can make a public stand saying they haven't raised the tax rate. But when the bill comes, the poor taxpayer is facing an increase that's typically twice the rate of inflation.
Unfortunately, those politicians may still be able to do that this year. Staples tells me that while residential values are dropping, commercial values are going up. So, in the end it winds up amounting to little more than a shell game. This time more of the property tax burden shifts from residential to businesses.
As I've written previously, this fall's property tax bills will come due just in time for the November election when voters are likely to be able to do something about them by way of tax revolt propositions on the ballot.
Then, after voters have slapped around local taxing authorities with new tax limitations, a year from now Staples office will be sending out next year's valuation notices, based on sales and values that took place from mid-2007 to mid-2008, the time we're in right now when people like U A economist Marshall Vest say we could be in a recession.
Decreasing property values and new restrictions will combine to make it very difficult for taxing entities. Maybe then government leaders will wake up and realize they're part of the economy too.
For now, I want to watch it unfold and relish it.