- Associated Press - Monday, June 8, 2015

PHOENIX (AP) - Pima County went to court Monday to block a property tax provision in the state budget package passed in March that imposes new financial burdens on Arizona counties.

The lawsuit is the latest example of the fierce opposition at the local level to Gov. Doug Ducey’s budget as it shifted more than $45 million in costs back to counties. Pima and Pinal counties are among the hardest hit by the changes.

The dispute centers around a 35-year-old constitutional amendment that caps county property taxes at 1 percent a home’s cash value. The rate can go higher when other taxing jurisdictions such as school districts and community colleges also levy property taxes.

The state has long provided additional money to counties for the amount that tax rates go above the cap. But under the new budget, the state is now saying it will only pay up to $1 million per county in additional state aid for education.

County officials said Monday the change could cost Pima and Pinal counties a combined $26 million, including roughly $18 million in Pima and $8 million in Pinal.

The lawsuit filed directly with the Arizona Supreme Court alleges the new provision unconstitutionally forces residents to pay taxes for services that do not benefit them. For example, Pima County residents’ property taxes will help pay for aid to Tucson Unified School District whether or not they live in that taxing jurisdiction.

“It’s someone paying a tax and not receiving any benefit from it,” Pima County Manager Chuck Huckelberry said.

The governor’s office said it’s reviewing the lawsuit but believes the budget plan protects Arizona taxpayers.

“We just received this lawsuit and are reviewing it. The enacted budget protects Arizona taxpayers from irresponsible taxation and responsibility balances a $1 billion budget shortfall,” spokesman Daniel Scarpinato said.

Huckelberry said the county is planning on raising property taxes to make up for the shortfall, and will continue to do so as necessary until the county reaches the one percent property tax cap.

“We don’t have anyone else to pass our financial obligations on like the state does, so unfortunately we have to pass our state aid obligation onto our taxpayers,” he said.



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