Taxes are high in Pima County for two reasons: state budget decisions drive higher taxes in counties, and residents are poorer than in Maricopa County.
That's the analysis of a tax policy economist Alberta Charney, a senior researcher at the Economic and Business Research Center in the Eller College of Management.
“There’s just so many issues involved with why taxes have been going up and a lot of it has to do with the legislature,” she said.
State budgeting decisions have driven down state revenue, and therefore cut into the share of state funds that go to local governments and school districts, Charney said.
Property taxes are based on the assessed value of a home or business, as determined by a county assessor. The tax bill is a function of the value multiplied by the tax rate.
Maricopa County property values are 30 percent higher than in Pima County, Charney said, which means tax rates have to be higher here to pay for an equal level of services.
“If we have less taxable property per capita than, say Maricopa County, then you have to start with a higher tax rate to generate the same amount per capita,” she said.
Add that to lower state revenues for cities, counties and schools, and local taxes rise, Charney said.
“They have to substitute out for what they’re not getting from the state."
State revenue is down because, compared to 30 years ago, the state has fewer sources of tax revenue, according to Charney's analysis.
Funds such as the vehicle license tax and estate taxes were either eliminated or diverted to specific uses, and are no longer available to fund most state services, which come from the portion of the budget that can change according to lawmaker's decisions. That's called the general fund.
“What used to represent about 16 percent of our general fund aren’t there any more, so we’re now down to just income taxes and sales, and they’ve cut the income tax rates seven times since 1990,” Charney said.
Once taxes are cut, they are hard to raise again, she said. It takes a simple majority (more than half of lawmakers) to cut taxes, but it takes a vote of two-thirds of lawmakers to raise taxes.