Council set to lower property tax rate after budget approval

June 11, 2009 – (RealEstateRama) – The city’s share of local property tax bills, now about 11 percent, is expected to dip lower under a 2009-10 city budget and budget-related measures recently adopted by the City Council.

The Council also voted to hold down increases in utility bills for water, sewer, refuse and recycling services to the lowest level since 2005.

A final vote on the lower tax rate is set at a June 16 City Council meeting, beginning at 5 p.m. at City Hall, 3939 N. Drinkwater Blvd.

If approved, the “combined” rate for city property taxes would decline from 79 cents to about 74 cents per $100 of assessed valuation, a drop of about 7 percent. The combined rate includes “primary” taxes that pay for city operations and “secondary” taxes that pay for construction and refurbishing of city streets and facilities.

The effect of the rate decrease on individual tax bills depends on the assessed value of each property, which is established by the Maricopa County Assessor’s Office. Assuming that the value remains unchanged from the previous year, the Council’s move would mean city property taxes on a house valued at $400,000 for tax purposes would fall by about $20.

The city does not set property tax rates for other jurisdictions, such as school districts, Maricopa County, or special tax districts. Taxes from these entities comprise the largest portion of property tax bills.

City utility rates for water, sewer, refuse and recycling services, on average, will rise about 2.4 percent in the next budget year. The typical homeowner’s utility bill is expected to increase about $1.90 a month. That increase is about half as much as last year’s utility bill increase, and is the smallest jump in five years.

The 2009-10 budget, approved June 2, goes into effect on July 1. The total budget adopted by the Council, which includes the city’s rate-funded utility services and multi-year public facilities projects, is about $1.1 billion, down from an adopted budget of $1.4 billion during the current year. The General Fund budget, which includes the tax-funded portion of the budget, will drop from $288 million this year to $257 million in 2009-10.

The budget assumes that operating revenues in the next fiscal year will decrease another 4 percent. The budget identifies reductions of more than 200 positions in the city staff. As adopted, it will require further reductions of more than $9 million prior to the end of the next fiscal year in June 2010.