Taxpayers Win, No Tax Rate Hike Ok’d
Office of Councilman Sal DiCiccio, District 6
602-262-7491
Council.district.6@phoenix.gov
Phoenix taxpayers earned a great (and rare) win on Tuesday when the Phoenix City Council voted unanimously to hold the property tax rate and to make up the expected deficit with spending cuts, innovations and structural changes.
“This is a huge victory for Phoenix taxpayers, but it’s only one step on the long road to fiscal stability for Phoenix,” said Councilman Sal DiCiccio, who supported holding down the rate. City staff originally had recommended a series of secondary property tax rate increases in out years that would have meant higher property tax rates in the city from 2013 until 2028.
The staff had recommended the increases because tax revenues have lagged predictions. That was because housing values have been lower than anticipated due to crash of the housing market.
Primary property taxes pay for maintenance and operations for the city. Secondary property taxes repay bonds and debt. Phoenix has had a policy of maintaining the combined tax rate at $1.82 per $100 of assessed valuation for a decade or more.
The motion by Councilman Bill Gates was in three parts:
- Making sure that the city maintains its bond credit rating without telling future councils how to fund that
- Delay about $200 million in bond projects and monitor bonds on the market, repurchasing some if that proves to be financially advantageous
- Told staff that the City Council expected the goals would be achieved through savings, spending cuts, managed competition or other innovations. Staff also was told to report on progress every six months.
DiCiccio said the council members’ push to hold the line on the tax rate was the first win for taxpayers after multiple losses, including a 2 percent food tax added in April that will extract $50 million a year from taxpayers, water and sewer rate increase (water rates have jumped 40 percent in the past five years), higher permit fees for businesses looking to open and expand and decreased services to the public. DiCiccio also has said the city needs to address its expensive labor pool, with the average Phoenix employee costing about $100,000 a year in total compensation.
Taxpayers and homeowners are hurting, he said. The last thing they need is the city piling on more taxes and fees – which would worsen the citizens’ plight, the city’s long-term financial health and the recession.
“The public was very clear,” said DiCiccio, who noted that calls to his office ran about 600 against a floating tax rate to about 20 for it. “They said, ‘Enough is enough.”
