Wednesday, May 26, 2010

Phoenix puts property-tax hike on hold

by Jahna Berry The Arizona Republic May. 26, 2010 12:00 AM

Phoenix city leaders will wait two years before deciding whether to increase a property-tax rate that has stayed the same for 14 years.

Because of falling property values, the city is collecting less money from its secondary property tax, which is used to pay bond debt.

Those voter-approved bond projects include building police stations and parks and roadwork.

If the property-tax slide continues for several years, Phoenix could have trouble making debt payments.

Instead of voting to increase the tax rate, the City Council voted on Tuesday to keep the current fixed combined property-tax rate, which is $1.82 per $100 of assessed valuation.

If the property-values problem persists in two years, the council either will vote to change the city's secondary tax rate, change the primary tax rate or use the city's general fund to cover debt payments, said Councilman Bill Gates.

The city also voted to delay $200 million in bond projects, refinance some debt and closely monitor the situation.

At Tuesday's meeting, many residents were prepared to speak out against a proposal that would have raised the property-tax rate beginning in July 2013.

Residents are hard-hit and paying too much for taxes, several residents said, noting that the city started a 2 percent food tax and that voters recently approved a 1 percent increase in the state sales tax.

The council is scheduled to take a formal vote on the property-tax levy at its July 7 meeting.

Phoenix puts property-tax hike on hold

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