The City of Maricopa issued a statement that lashed out against state lawmakers this week, blaming the Legislature and Gov. Doug Ducey for tax increases expected to show up on the next property tax bill for Maricopa homeowners.
The raise in secondary property taxes in Maricopa will cost approximately $45 per $100,000 of assessed home value, according to a City Hall press release published Aug. 15.
The release was published on behalf of the City of Maricopa, Pinal County and Maricopa Unified School District, said City Manager Rick Horst.
What does the tax do?
The local tax pays for desegregation funding utilized by MUSD to hire qualified teachers, implement extra support for English Language Learners and other programming.
Nearly 20 Arizona school districts receive this money to aid in compliance with an order from the U.S. Department of Education Office for Civil Rights to remediate alleged or proven racial discrimination, according to statute.
MUSD has received desegregation funding since approximately the late 1990s, according to one school official.
The new law shifts the cost burden, previously assigned to taxpayers statewide, to homeowners who live in school districts that receive desegregation dollars.
It’s an issue complicated by Arizona’s complex tax system that mandates a 1 percent property tax cap. The state used to backfill those funds cut off by the cap. Now it’s up to resident homeowners.
Local pushback against the tax
The city says the shift in responsibility is unlawful because voters didn’t get a say.
“The state Legislature passed a law that instituted a secondary property tax without putting it to a vote of those affected, which we believe is illegal and unconstitutional,” the press release stated.
Mayor Christian Price deferred comment on the subject to Councilmember Nancy Smith.
Smith said Pinal County, the City of Maricopa and Arizona school districts, including MUSD, will analyze the possibilities of legal options to appeal the tax.
Other alternative solutions include restructuring school funding and more dialogue with state legislators.
“We simply ask our state Legislature to come to the table with us to increase communication and allow us to help solve complex issues,” Smith said.
Smith has been a vocal critic of the Legislature, which, she said, often balances its budget “on the backs of towns, cities, counties,” and now school districts.
Smith said those decisions by the state force local governments to determine how to adapt increased costs passed down to them, often taking the form of tax increases.
“We believe it is disingenuous when we hear statements that indicate that our state budget has been passed without raising taxes, when in truth a portion of their budget has been passed to local governments,” Smith said.
The Pinal County Board of Supervisors approved the tax unanimously during a special meeting Wednesday – with some reluctance.
“I join with my fellow electeds in the City of Maricopa and Maricopa Unified School District as far as protesting this particular new tax,” said Supervisor Anthony Smith, husband of Nancy Smith.
State lawmakers double down on tax legality
Senate Bill 1529, signed by Ducey and passed by the Legislature in May, alleges secondary property taxes “levied pursuant to this subsection do not require voter approval.”
State Rep. Mark Finchem (LD 11) maintained the tax’s legality in an opinion piece sent to InMaricopa Thursday.
“This is not a new tax, it is a tax moved from one funding source to another, putting the responsibility for funding on the community that uses the school system, and not other communities that do not have a segregation compliance problem with the U.S. Department of Justice Office of Civil Rights,” Finchem wrote.
Desegregation funding has long been a thorn in many state lawmakers’ sides, with previous, unsuccessful efforts to alleviate the state’s funding portion in the past.
“This issue was on the table long before the now very successful 20×2020 was finalized,” said Rep. Vince Leach (LD 11) regarding Ducey’s teacher salary-raise plan included in this year’s state budget.
Leach suggested lowering local government spending and tax rates to fix the problem.
State Sen. Steve Smith (LD 11) questioned how districts spend the money and whether those funds are necessary.
Smith said a solution to the tax debacle is simple: Strike out desegregation funding.
“It’s a bad tax that the local level should eliminate and get rid of it altogether,” Smith said.
MUSD: Desegregation funds crucial to success for every student
District officials said the funding keeps classroom sizes manageable, provides
programming that aids in closing student achievement gaps and is necessary for teaching positions that primarily serve English Language Learners.
The district receives approximately $1.29 million annually in desegregation monies that fund the salaries of about 25 teachers throughout nine schools, according to Superintendent Tracey Lopeman.
“It would be devastating if we lost that funding,” Lopeman said.