FLORENCE — Pinal County’s primary property tax rate, which has been steadily lowered by four cents in each of the last three years, could be headed downward again as the Board of Supervisors begins debating the new year’s budget.
Last year the county met its strategic goal of lowering the tax rate to $3.75 per $100 of net assessed value, Pinal County Budget Director Angeline Woods told the board on March 10Wednesday. If the rate remains the same, the county would still collect $6.7 million more in the new budget year, thanks to $125 million in new construction and existing property values appreciating by $55 million.
If the supervisors opt for no increase in actual tax collections — a “flat levy” — the tax rate would drop to $3.6755 and the county would have no need to hold a Truth in Taxation hearing under state law. Each one-cent decrease in the tax rate would reduce county revenue by $287,000.
Supervisor Mike Goodman, R-San Tan Valley, asked to see how the budget would be affected by a flat levy or reducing the tax rate to $3.72. He also asked to see the budget worksheet county departments use in comparison to their previous year’s budget.
Goodman further said he’d like to see some accountability for the funding the county awards to nonprofits at budget time. “I’d like to see how those funds have been spent in comparison to what they’re asking for in the future.”
Woods said the supervisors will vote on budget requests on May 26, adopt a tentative budget on June 9 and a final budget on July 7.
Ten years ago, Pinal County had the state’s second-highest property tax rate and “we’re now the fourth-highest. So as we’re decreasing, other counties are doing similar things,” Woods said.
Pinal had the third-highest combined property tax rate 10 years ago but has improved to fourth-highest. Some secondary taxes, which the county has no control over, contribute to that number, Woods said.
Just over half of Pinal County revenue comes from primary property tax, including delinquent tax lien sales. The next biggest revenue stream, at 29% of the budget, is intergovernmental revenue, which includes state shared revenue. Sales tax makes up another 9% of county revenue.
Pinal County spends the most — 63% of its General Fund budget — on criminal justice and law enforcement, followed by 25% on “general government.” Supervisor Jeff McClure, R-Eagle Crest Ranch, asked for a more detailed breakdown of the county’s criminal justice and law enforcement spending.
The county spends 11% of its General Fund on health, including mandatory state health care contributions and behavioral health.
The county expects to end the current budget year on June 30 with more than $9.6 million in revenues ahead of expenditures, and an ending General Fund balance of almost $47.5 million.
Supervisor Kevin Cavanaugh, R-Coolidge, asked how the county can protect itself from inflation as the federal government prints money. County Manager Leo Lew said it’s one of many arguments for maintaining healthy fund balances.
Cavanaugh further asked how the county can move up from a AA credit rating to a AAA rating. Woods replied it’s economic development, it’s cash in the county’s bank and how credit rating agencies view Pinal County government.
“Anything that we can do to make our government stronger, the better our rate will be.” Setting priorities in the county’s next strategic plan could also boost the rating, Woods said.
Other items of discussion Woods presented on March 10Wednesday included:
- County sales tax revenues increased an average of 3.6% each year from 2012 through 2017, and have increased an average of 10.4% annually since then.
- State shared sales tax revenue jumped 27.6% 10 years ago with increased county population following the U.S. Census, followed by smaller increases each year. For the last three years, this revenue has increased an average of 7.2% annually.
- Pinal County had the state’s seventh-highest primary property tax levy per capita at $222 this year, which was just $18 or 9% higher than the state average. Ten years ago, the per capita dollar amount was $272, which was the fourth-highest in the state and about $51 above the average.
- The primary property tax burden as a percentage of personal income in Pinal was 1.16% 10 years ago, and it was the state’s highest. “The ability of our constituents to pay taxes was a lot worse than it is today,” Woods said. It has since been reduced to 0.74% to become the tenth-highest.
- The county’s aggregate income has increased in a decade by 55%, the primary tax levy has decreased by 2% while population has increased by 21%. “So we’re doing more with less,” Woods told the board.