Tuesday, August 30, 2011

Most Maricopa County homeowners to receive property-tax cut

For the first time since metro Phoenix home values crashed, most of the region's homeowners can expect a noticeable drop in their property taxes.

Maricopa County property-tax bills are being mailed this week, and the average homeowner bill is expected to decline more than $60 from last year's bill.

The bills reflect taxes from a variety of cities, school districts and other taxation districts, which take a percentage of a property's assessed value each year.

Most of those districts raised tax rates this year, but the overall amount of taxes those districts plan to collect is down almost 6 percent.

And although tax bills are tied to a property's assessed value, the decline is also partly because of budget cuts by public agencies across the state, which set their budgets, then adjust tax rates to match.

For example, the Maricopa County Board of Supervisors decided two weeks ago to raise the county's property-tax rate from $1.05 in 2010 to $1.24 per $100 of net assessed valuation.

At the same time, the amount the county will collect from property taxes will fall by $21.7 million because of decreased assessed home values. To deal with the revenue shortfall, the county has spread budget cuts across its approximately 50 agencies and departments.

"I think that this is rather telling about the insignificance of tax rates," said Charles Hoskins, county treasurer. "Rates have increased because values have dropped more than spending, but the reduced spending is what ultimately determines what property owners pay."

This year's tax bills are based on 2009's valuations, when Valley home prices dropped a median of 15.2 percent. That was the third consecutive drop for home valuations in Maricopa County. Next year's property taxes will be based on 2010 valuations, which showed home values fell 11 percent.

Last year, county property-tax assessments were down 3.7 percent from 2009. But not every homeowner saw a decrease in his tax bills during 2010 because several municipalities and special districts had to raise their tax rates to offset budget shortfalls.

This year, Hoskins expects most homeowners to see a decrease.

Although tax bills are declining, the drop isn't nearly as much as the plunge in home prices, which have tumbled about 60 percent since 2006.

And Kevin McCarthy, president of the Arizona Tax Research Association, cautioned that not all homeowners' tax bills will drop. It will depend on how much their respective school districts and cities raise tax rates. School districts are expected to raise taxes this year, he said. On average, property taxes from school districts make up 61 percent of a homeowner's tax bill.

A homeowner living in Glendale Elementary School District whose property was assessed at the median value of $140,000 for last year's taxes and $124,500 for this year's may pay $76 more this tax year.

But the owner of an equivalent home in the Isaac School District in Phoenix may pay $99 less.

Both cities kept their tax rates flat, and both school districts increased their rates, but because the increase was smaller in Isaac, the total tax bill decreases.

"A blanket statement about everybody's taxes in the county going down will be problematic on that level," McCarthy said. "The things that might be driving some softening of the tax bill at the county level are not going to occur at the school-district level and, to a lesser extent, at a city level."

Tax system

Property values are assessed annually, and county tax bills based on those assessments arrive 18 months later.

The bills are based on a formula based on two factors: property valuations set by the assessor and tax rates set by nearly 1,500 municipalities and other tax jurisdictions.

Those jurisdictions - counties, cities, school districts, community-college districts and other special districts - determine the actual tax load for any given home.

A tax bill is a composite of the taxes assessed by those many different districts. A home that is inside a certain parks district, for example, may pay higher taxes than an identical home nearby that lies outside district lines.

To set rates, the taxing jurisdictions must first figure out how much money they need to fund their budgets.

Then, the district and municipalities work backward to set their tax rate. Under this system, a decline in value without an equal drop in a jurisdiction's budget will cause tax rates and taxes to go up.

All jurisdictions have a legal cap on how much they can raise tax rates, which is mandated when they are formed.

But districts can take a larger amount through local bond issues or voter-approved school-funding increases called budget overrides. This year, Hoskins said $1 out of every $5 assessed for property taxes will go toward voter-approved budget overrides and debt payments.

Homeowners' tax bills show which taxing jurisdictions are contributing to their total assessment.

The total assessed tax for all Maricopa County homeowners from all taxing districts is $3.9 billion this year. That compares with $4.2 billion last year and $4.3 billion in 2009.

Tax trends

Tax consultants believe Maricopa County has one of the most complicated property-taxing systems in the country. However, property-tax reform doesn't draw as much support in Arizona as other parts of the nation because the state has one of the lowest tax rates.

Arizona has the 39th-lowest property-tax rate in America, according to the Tax Foundation, a Washington, D.C.-based non-profit.

McCarthy said although that may be the case for residential homes, Arizona ranks about 16th-highest state in commercial- and industrial-tax rates.

The residential-home market may have bottomed out, but the commercial market still has room to decline, and business taxpayers are still seeing tax increases, he said.

"We have low homeowner property taxes, and we have high business-property taxes because we don't generate property taxes from homeowners on an even basis like most states," McCarthy said.

by Catherine Reagor and Michelle Ye Hee Lee The Arizona Republic Aug. 30, 2011 12:00 AM




Most Maricopa County homeowners to receive property-tax cut

Most Maricopa County homeowners to receive property-tax cut

For the first time since metro Phoenix home values crashed, most of the region's homeowners can expect a noticeable drop in their property taxes.



Maricopa County property-tax bills are being mailed this week, and the average homeowner bill is expected to decline more than $60 from last year's bill.



The bills reflect taxes from a variety of cities, school districts and other taxation districts, which take a percentage of a property's assessed value each year.



Most of those districts raised tax rates this year, but the overall amount of taxes those districts plan to collect is down almost 6 percent.



And although tax bills are tied to a property's assessed value, the decline is also partly because of budget cuts by public agencies across the state, which set their budgets, then adjust tax rates to match.



For example, the Maricopa County Board of Supervisors decided two weeks ago to raise the county's property-tax rate from $1.05 in 2010 to $1.24 per $100 of net assessed valuation.



At the same time, the amount the county will collect from property taxes will fall by $21.7 million because of decreased assessed home values. To deal with the revenue shortfall, the county has spread budget cuts across its approximately 50 agencies and departments.



"I think that this is rather telling about the insignificance of tax rates," said Charles Hoskins, county treasurer. "Rates have increased because values have dropped more than spending, but the reduced spending is what ultimately determines what property owners pay."



This year's tax bills are based on 2009's valuations, when Valley home prices dropped a median of 15.2 percent. That was the third consecutive drop for home valuations in Maricopa County. Next year's property taxes will be based on 2010 valuations, which showed home values fell 11 percent.



Last year, county property-tax assessments were down 3.7 percent from 2009. But not every homeowner saw a decrease in his tax bills during 2010 because several municipalities and special districts had to raise their tax rates to offset budget shortfalls.



This year, Hoskins expects most homeowners to see a decrease.



Although tax bills are declining, the drop isn't nearly as much as the plunge in home prices, which have tumbled about 60 percent since 2006.



And Kevin McCarthy, president of the Arizona Tax Research Association, cautioned that not all homeowners' tax bills will drop. It will depend on how much their respective school districts and cities raise tax rates. School districts are expected to raise taxes this year, he said. On average, property taxes from school districts make up 61 percent of a homeowner's tax bill.



A homeowner living in Glendale Elementary School District whose property was assessed at the median value of $140,000 for last year's taxes and $124,500 for this year's may pay $76 more this tax year.



But the owner of an equivalent home in the Isaac School District in Phoenix may pay $99 less.



Both cities kept their tax rates flat, and both school districts increased their rates, but because the increase was smaller in Isaac, the total tax bill decreases.



"A blanket statement about everybody's taxes in the county going down will be problematic on that level," McCarthy said. "The things that might be driving some softening of the tax bill at the county level are not going to occur at the school-district level and, to a lesser extent, at a city level."



Tax system



Property values are assessed annually, and county tax bills based on those assessments arrive 18 months later.



The bills are based on a formula based on two factors: property valuations set by the assessor and tax rates set by nearly 1,500 municipalities and other tax jurisdictions.



Those jurisdictions - counties, cities, school districts, community-college districts and other special districts - determine the actual tax load for any given home.



A tax bill is a composite of the taxes assessed by those many different districts. A home that is inside a certain parks district, for example, may pay higher taxes than an identical home nearby that lies outside district lines.



To set rates, the taxing jurisdictions must first figure out how much money they need to fund their budgets.



Then, the district and municipalities work backward to set their tax rate. Under this system, a decline in value without an equal drop in a jurisdiction's budget will cause tax rates and taxes to go up.



All jurisdictions have a legal cap on how much they can raise tax rates, which is mandated when they are formed.



But districts can take a larger amount through local bond issues or voter-approved school-funding increases called budget overrides. This year, Hoskins said $1 out of every $5 assessed for property taxes will go toward voter-approved budget overrides and debt payments.



Homeowners' tax bills show which taxing jurisdictions are contributing to their total assessment.



The total assessed tax for all Maricopa County homeowners from all taxing districts is $3.9 billion this year. That compares with $4.2 billion last year and $4.3 billion in 2009.



Tax trends



Tax consultants believe Maricopa County has one of the most complicated property-taxing systems in the country. However, property-tax reform doesn't draw as much support in Arizona as other parts of the nation because the state has one of the lowest tax rates.



Arizona has the 39th-lowest property-tax rate in America, according to the Tax Foundation, a Washington, D.C.-based non-profit.



McCarthy said although that may be the case for residential homes, Arizona ranks about 16th-highest state in commercial- and industrial-tax rates.



The residential-home market may have bottomed out, but the commercial market still has room to decline, and business taxpayers are still seeing tax increases, he said.



"We have low homeowner property taxes, and we have high business-property taxes because we don't generate property taxes from homeowners on an even basis like most states," McCarthy said.



by Catherine Reagor and Michelle Ye Hee Lee The Arizona Republic Aug. 30, 2011 12:00 AM







Most Maricopa County homeowners to receive property-tax cut

Most Maricopa County homeowners to receive property-tax cut

For the first time since metro Phoenix home values crashed, most of the region's homeowners can expect a noticeable drop in their property taxes.



Maricopa County property-tax bills are being mailed this week, and the average homeowner bill is expected to decline more than $60 from last year's bill.



The bills reflect taxes from a variety of cities, school districts and other taxation districts, which take a percentage of a property's assessed value each year.



Most of those districts raised tax rates this year, but the overall amount of taxes those districts plan to collect is down almost 6 percent.



And although tax bills are tied to a property's assessed value, the decline is also partly because of budget cuts by public agencies across the state, which set their budgets, then adjust tax rates to match.



For example, the Maricopa County Board of Supervisors decided two weeks ago to raise the county's property-tax rate from $1.05 in 2010 to $1.24 per $100 of net assessed valuation.



At the same time, the amount the county will collect from property taxes will fall by $21.7 million because of decreased assessed home values. To deal with the revenue shortfall, the county has spread budget cuts across its approximately 50 agencies and departments.



"I think that this is rather telling about the insignificance of tax rates," said Charles Hoskins, county treasurer. "Rates have increased because values have dropped more than spending, but the reduced spending is what ultimately determines what property owners pay."



This year's tax bills are based on 2009's valuations, when Valley home prices dropped a median of 15.2 percent. That was the third consecutive drop for home valuations in Maricopa County. Next year's property taxes will be based on 2010 valuations, which showed home values fell 11 percent.



Last year, county property-tax assessments were down 3.7 percent from 2009. But not every homeowner saw a decrease in his tax bills during 2010 because several municipalities and special districts had to raise their tax rates to offset budget shortfalls.



This year, Hoskins expects most homeowners to see a decrease.



Although tax bills are declining, the drop isn't nearly as much as the plunge in home prices, which have tumbled about 60 percent since 2006.



And Kevin McCarthy, president of the Arizona Tax Research Association, cautioned that not all homeowners' tax bills will drop. It will depend on how much their respective school districts and cities raise tax rates. School districts are expected to raise taxes this year, he said. On average, property taxes from school districts make up 61 percent of a homeowner's tax bill.



A homeowner living in Glendale Elementary School District whose property was assessed at the median value of $140,000 for last year's taxes and $124,500 for this year's may pay $76 more this tax year.



But the owner of an equivalent home in the Isaac School District in Phoenix may pay $99 less.



Both cities kept their tax rates flat, and both school districts increased their rates, but because the increase was smaller in Isaac, the total tax bill decreases.



"A blanket statement about everybody's taxes in the county going down will be problematic on that level," McCarthy said. "The things that might be driving some softening of the tax bill at the county level are not going to occur at the school-district level and, to a lesser extent, at a city level."



Tax system



Property values are assessed annually, and county tax bills based on those assessments arrive 18 months later.



The bills are based on a formula based on two factors: property valuations set by the assessor and tax rates set by nearly 1,500 municipalities and other tax jurisdictions.



Those jurisdictions - counties, cities, school districts, community-college districts and other special districts - determine the actual tax load for any given home.



A tax bill is a composite of the taxes assessed by those many different districts. A home that is inside a certain parks district, for example, may pay higher taxes than an identical home nearby that lies outside district lines.



To set rates, the taxing jurisdictions must first figure out how much money they need to fund their budgets.



Then, the district and municipalities work backward to set their tax rate. Under this system, a decline in value without an equal drop in a jurisdiction's budget will cause tax rates and taxes to go up.



All jurisdictions have a legal cap on how much they can raise tax rates, which is mandated when they are formed.



But districts can take a larger amount through local bond issues or voter-approved school-funding increases called budget overrides. This year, Hoskins said $1 out of every $5 assessed for property taxes will go toward voter-approved budget overrides and debt payments.



Homeowners' tax bills show which taxing jurisdictions are contributing to their total assessment.



The total assessed tax for all Maricopa County homeowners from all taxing districts is $3.9 billion this year. That compares with $4.2 billion last year and $4.3 billion in 2009.



Tax trends



Tax consultants believe Maricopa County has one of the most complicated property-taxing systems in the country. However, property-tax reform doesn't draw as much support in Arizona as other parts of the nation because the state has one of the lowest tax rates.



Arizona has the 39th-lowest property-tax rate in America, according to the Tax Foundation, a Washington, D.C.-based non-profit.



McCarthy said although that may be the case for residential homes, Arizona ranks about 16th-highest state in commercial- and industrial-tax rates.



The residential-home market may have bottomed out, but the commercial market still has room to decline, and business taxpayers are still seeing tax increases, he said.



"We have low homeowner property taxes, and we have high business-property taxes because we don't generate property taxes from homeowners on an even basis like most states," McCarthy said.



by Catherine Reagor and Michelle Ye Hee Lee The Arizona Republic Aug. 30, 2011 12:00 AM







Most Maricopa County homeowners to receive property-tax cut

Most Maricopa County homeowners to receive property-tax cut

For the first time since metro Phoenix home values crashed, most of the region's homeowners can expect a noticeable drop in their property taxes.



Maricopa County property-tax bills are being mailed this week, and the average homeowner bill is expected to decline more than $60 from last year's bill.



The bills reflect taxes from a variety of cities, school districts and other taxation districts, which take a percentage of a property's assessed value each year.



Most of those districts raised tax rates this year, but the overall amount of taxes those districts plan to collect is down almost 6 percent.



And although tax bills are tied to a property's assessed value, the decline is also partly because of budget cuts by public agencies across the state, which set their budgets, then adjust tax rates to match.



For example, the Maricopa County Board of Supervisors decided two weeks ago to raise the county's property-tax rate from $1.05 in 2010 to $1.24 per $100 of net assessed valuation.



At the same time, the amount the county will collect from property taxes will fall by $21.7 million because of decreased assessed home values. To deal with the revenue shortfall, the county has spread budget cuts across its approximately 50 agencies and departments.



"I think that this is rather telling about the insignificance of tax rates," said Charles Hoskins, county treasurer. "Rates have increased because values have dropped more than spending, but the reduced spending is what ultimately determines what property owners pay."



This year's tax bills are based on 2009's valuations, when Valley home prices dropped a median of 15.2 percent. That was the third consecutive drop for home valuations in Maricopa County. Next year's property taxes will be based on 2010 valuations, which showed home values fell 11 percent.



Last year, county property-tax assessments were down 3.7 percent from 2009. But not every homeowner saw a decrease in his tax bills during 2010 because several municipalities and special districts had to raise their tax rates to offset budget shortfalls.



This year, Hoskins expects most homeowners to see a decrease.



Although tax bills are declining, the drop isn't nearly as much as the plunge in home prices, which have tumbled about 60 percent since 2006.



And Kevin McCarthy, president of the Arizona Tax Research Association, cautioned that not all homeowners' tax bills will drop. It will depend on how much their respective school districts and cities raise tax rates. School districts are expected to raise taxes this year, he said. On average, property taxes from school districts make up 61 percent of a homeowner's tax bill.



A homeowner living in Glendale Elementary School District whose property was assessed at the median value of $140,000 for last year's taxes and $124,500 for this year's may pay $76 more this tax year.



But the owner of an equivalent home in the Isaac School District in Phoenix may pay $99 less.



Both cities kept their tax rates flat, and both school districts increased their rates, but because the increase was smaller in Isaac, the total tax bill decreases.



"A blanket statement about everybody's taxes in the county going down will be problematic on that level," McCarthy said. "The things that might be driving some softening of the tax bill at the county level are not going to occur at the school-district level and, to a lesser extent, at a city level."



Tax system



Property values are assessed annually, and county tax bills based on those assessments arrive 18 months later.



The bills are based on a formula based on two factors: property valuations set by the assessor and tax rates set by nearly 1,500 municipalities and other tax jurisdictions.



Those jurisdictions - counties, cities, school districts, community-college districts and other special districts - determine the actual tax load for any given home.



A tax bill is a composite of the taxes assessed by those many different districts. A home that is inside a certain parks district, for example, may pay higher taxes than an identical home nearby that lies outside district lines.



To set rates, the taxing jurisdictions must first figure out how much money they need to fund their budgets.



Then, the district and municipalities work backward to set their tax rate. Under this system, a decline in value without an equal drop in a jurisdiction's budget will cause tax rates and taxes to go up.



All jurisdictions have a legal cap on how much they can raise tax rates, which is mandated when they are formed.



But districts can take a larger amount through local bond issues or voter-approved school-funding increases called budget overrides. This year, Hoskins said $1 out of every $5 assessed for property taxes will go toward voter-approved budget overrides and debt payments.



Homeowners' tax bills show which taxing jurisdictions are contributing to their total assessment.



The total assessed tax for all Maricopa County homeowners from all taxing districts is $3.9 billion this year. That compares with $4.2 billion last year and $4.3 billion in 2009.



Tax trends



Tax consultants believe Maricopa County has one of the most complicated property-taxing systems in the country. However, property-tax reform doesn't draw as much support in Arizona as other parts of the nation because the state has one of the lowest tax rates.



Arizona has the 39th-lowest property-tax rate in America, according to the Tax Foundation, a Washington, D.C.-based non-profit.



McCarthy said although that may be the case for residential homes, Arizona ranks about 16th-highest state in commercial- and industrial-tax rates.



The residential-home market may have bottomed out, but the commercial market still has room to decline, and business taxpayers are still seeing tax increases, he said.



"We have low homeowner property taxes, and we have high business-property taxes because we don't generate property taxes from homeowners on an even basis like most states," McCarthy said.



by Catherine Reagor and Michelle Ye Hee Lee The Arizona Republic Aug. 30, 2011 12:00 AM







Most Maricopa County homeowners to receive property-tax cut

Most Maricopa County homeowners to receive property-tax cut

For the first time since metro Phoenix home values crashed, most of the region's homeowners can expect a noticeable drop in their property taxes.



Maricopa County property-tax bills are being mailed this week, and the average homeowner bill is expected to decline more than $60 from last year's bill.



The bills reflect taxes from a variety of cities, school districts and other taxation districts, which take a percentage of a property's assessed value each year.



Most of those districts raised tax rates this year, but the overall amount of taxes those districts plan to collect is down almost 6 percent.



And although tax bills are tied to a property's assessed value, the decline is also partly because of budget cuts by public agencies across the state, which set their budgets, then adjust tax rates to match.



For example, the Maricopa County Board of Supervisors decided two weeks ago to raise the county's property-tax rate from $1.05 in 2010 to $1.24 per $100 of net assessed valuation.



At the same time, the amount the county will collect from property taxes will fall by $21.7 million because of decreased assessed home values. To deal with the revenue shortfall, the county has spread budget cuts across its approximately 50 agencies and departments.



"I think that this is rather telling about the insignificance of tax rates," said Charles Hoskins, county treasurer. "Rates have increased because values have dropped more than spending, but the reduced spending is what ultimately determines what property owners pay."



This year's tax bills are based on 2009's valuations, when Valley home prices dropped a median of 15.2 percent. That was the third consecutive drop for home valuations in Maricopa County. Next year's property taxes will be based on 2010 valuations, which showed home values fell 11 percent.



Last year, county property-tax assessments were down 3.7 percent from 2009. But not every homeowner saw a decrease in his tax bills during 2010 because several municipalities and special districts had to raise their tax rates to offset budget shortfalls.



This year, Hoskins expects most homeowners to see a decrease.



Although tax bills are declining, the drop isn't nearly as much as the plunge in home prices, which have tumbled about 60 percent since 2006.



And Kevin McCarthy, president of the Arizona Tax Research Association, cautioned that not all homeowners' tax bills will drop. It will depend on how much their respective school districts and cities raise tax rates. School districts are expected to raise taxes this year, he said. On average, property taxes from school districts make up 61 percent of a homeowner's tax bill.



A homeowner living in Glendale Elementary School District whose property was assessed at the median value of $140,000 for last year's taxes and $124,500 for this year's may pay $76 more this tax year.



But the owner of an equivalent home in the Isaac School District in Phoenix may pay $99 less.



Both cities kept their tax rates flat, and both school districts increased their rates, but because the increase was smaller in Isaac, the total tax bill decreases.



"A blanket statement about everybody's taxes in the county going down will be problematic on that level," McCarthy said. "The things that might be driving some softening of the tax bill at the county level are not going to occur at the school-district level and, to a lesser extent, at a city level."



Tax system



Property values are assessed annually, and county tax bills based on those assessments arrive 18 months later.



The bills are based on a formula based on two factors: property valuations set by the assessor and tax rates set by nearly 1,500 municipalities and other tax jurisdictions.



Those jurisdictions - counties, cities, school districts, community-college districts and other special districts - determine the actual tax load for any given home.



A tax bill is a composite of the taxes assessed by those many different districts. A home that is inside a certain parks district, for example, may pay higher taxes than an identical home nearby that lies outside district lines.



To set rates, the taxing jurisdictions must first figure out how much money they need to fund their budgets.



Then, the district and municipalities work backward to set their tax rate. Under this system, a decline in value without an equal drop in a jurisdiction's budget will cause tax rates and taxes to go up.



All jurisdictions have a legal cap on how much they can raise tax rates, which is mandated when they are formed.



But districts can take a larger amount through local bond issues or voter-approved school-funding increases called budget overrides. This year, Hoskins said $1 out of every $5 assessed for property taxes will go toward voter-approved budget overrides and debt payments.



Homeowners' tax bills show which taxing jurisdictions are contributing to their total assessment.



The total assessed tax for all Maricopa County homeowners from all taxing districts is $3.9 billion this year. That compares with $4.2 billion last year and $4.3 billion in 2009.



Tax trends



Tax consultants believe Maricopa County has one of the most complicated property-taxing systems in the country. However, property-tax reform doesn't draw as much support in Arizona as other parts of the nation because the state has one of the lowest tax rates.



Arizona has the 39th-lowest property-tax rate in America, according to the Tax Foundation, a Washington, D.C.-based non-profit.



McCarthy said although that may be the case for residential homes, Arizona ranks about 16th-highest state in commercial- and industrial-tax rates.



The residential-home market may have bottomed out, but the commercial market still has room to decline, and business taxpayers are still seeing tax increases, he said.



"We have low homeowner property taxes, and we have high business-property taxes because we don't generate property taxes from homeowners on an even basis like most states," McCarthy said.



by Catherine Reagor and Michelle Ye Hee Lee The Arizona Republic Aug. 30, 2011 12:00 AM







Most Maricopa County homeowners to receive property-tax cut

Most Maricopa County homeowners to receive property-tax cut

For the first time since metro Phoenix home values crashed, most of the region's homeowners can expect a noticeable drop in their property taxes.



Maricopa County property-tax bills are being mailed this week, and the average homeowner bill is expected to decline more than $60 from last year's bill.



The bills reflect taxes from a variety of cities, school districts and other taxation districts, which take a percentage of a property's assessed value each year.



Most of those districts raised tax rates this year, but the overall amount of taxes those districts plan to collect is down almost 6 percent.



And although tax bills are tied to a property's assessed value, the decline is also partly because of budget cuts by public agencies across the state, which set their budgets, then adjust tax rates to match.



For example, the Maricopa County Board of Supervisors decided two weeks ago to raise the county's property-tax rate from $1.05 in 2010 to $1.24 per $100 of net assessed valuation.



At the same time, the amount the county will collect from property taxes will fall by $21.7 million because of decreased assessed home values. To deal with the revenue shortfall, the county has spread budget cuts across its approximately 50 agencies and departments.



"I think that this is rather telling about the insignificance of tax rates," said Charles Hoskins, county treasurer. "Rates have increased because values have dropped more than spending, but the reduced spending is what ultimately determines what property owners pay."



This year's tax bills are based on 2009's valuations, when Valley home prices dropped a median of 15.2 percent. That was the third consecutive drop for home valuations in Maricopa County. Next year's property taxes will be based on 2010 valuations, which showed home values fell 11 percent.



Last year, county property-tax assessments were down 3.7 percent from 2009. But not every homeowner saw a decrease in his tax bills during 2010 because several municipalities and special districts had to raise their tax rates to offset budget shortfalls.



This year, Hoskins expects most homeowners to see a decrease.



Although tax bills are declining, the drop isn't nearly as much as the plunge in home prices, which have tumbled about 60 percent since 2006.



And Kevin McCarthy, president of the Arizona Tax Research Association, cautioned that not all homeowners' tax bills will drop. It will depend on how much their respective school districts and cities raise tax rates. School districts are expected to raise taxes this year, he said. On average, property taxes from school districts make up 61 percent of a homeowner's tax bill.



A homeowner living in Glendale Elementary School District whose property was assessed at the median value of $140,000 for last year's taxes and $124,500 for this year's may pay $76 more this tax year.



But the owner of an equivalent home in the Isaac School District in Phoenix may pay $99 less.



Both cities kept their tax rates flat, and both school districts increased their rates, but because the increase was smaller in Isaac, the total tax bill decreases.



"A blanket statement about everybody's taxes in the county going down will be problematic on that level," McCarthy said. "The things that might be driving some softening of the tax bill at the county level are not going to occur at the school-district level and, to a lesser extent, at a city level."



Tax system



Property values are assessed annually, and county tax bills based on those assessments arrive 18 months later.



The bills are based on a formula based on two factors: property valuations set by the assessor and tax rates set by nearly 1,500 municipalities and other tax jurisdictions.



Those jurisdictions - counties, cities, school districts, community-college districts and other special districts - determine the actual tax load for any given home.



A tax bill is a composite of the taxes assessed by those many different districts. A home that is inside a certain parks district, for example, may pay higher taxes than an identical home nearby that lies outside district lines.



To set rates, the taxing jurisdictions must first figure out how much money they need to fund their budgets.



Then, the district and municipalities work backward to set their tax rate. Under this system, a decline in value without an equal drop in a jurisdiction's budget will cause tax rates and taxes to go up.



All jurisdictions have a legal cap on how much they can raise tax rates, which is mandated when they are formed.



But districts can take a larger amount through local bond issues or voter-approved school-funding increases called budget overrides. This year, Hoskins said $1 out of every $5 assessed for property taxes will go toward voter-approved budget overrides and debt payments.



Homeowners' tax bills show which taxing jurisdictions are contributing to their total assessment.



The total assessed tax for all Maricopa County homeowners from all taxing districts is $3.9 billion this year. That compares with $4.2 billion last year and $4.3 billion in 2009.



Tax trends



Tax consultants believe Maricopa County has one of the most complicated property-taxing systems in the country. However, property-tax reform doesn't draw as much support in Arizona as other parts of the nation because the state has one of the lowest tax rates.



Arizona has the 39th-lowest property-tax rate in America, according to the Tax Foundation, a Washington, D.C.-based non-profit.



McCarthy said although that may be the case for residential homes, Arizona ranks about 16th-highest state in commercial- and industrial-tax rates.



The residential-home market may have bottomed out, but the commercial market still has room to decline, and business taxpayers are still seeing tax increases, he said.



"We have low homeowner property taxes, and we have high business-property taxes because we don't generate property taxes from homeowners on an even basis like most states," McCarthy said.



by Catherine Reagor and Michelle Ye Hee Lee The Arizona Republic Aug. 30, 2011 12:00 AM







Most Maricopa County homeowners to receive property-tax cut

Most Maricopa County homeowners to receive property-tax cut

For the first time since metro Phoenix home values crashed, most of the region's homeowners can expect a noticeable drop in their property taxes.



Maricopa County property-tax bills are being mailed this week, and the average homeowner bill is expected to decline more than $60 from last year's bill.



The bills reflect taxes from a variety of cities, school districts and other taxation districts, which take a percentage of a property's assessed value each year.



Most of those districts raised tax rates this year, but the overall amount of taxes those districts plan to collect is down almost 6 percent.



And although tax bills are tied to a property's assessed value, the decline is also partly because of budget cuts by public agencies across the state, which set their budgets, then adjust tax rates to match.



For example, the Maricopa County Board of Supervisors decided two weeks ago to raise the county's property-tax rate from $1.05 in 2010 to $1.24 per $100 of net assessed valuation.



At the same time, the amount the county will collect from property taxes will fall by $21.7 million because of decreased assessed home values. To deal with the revenue shortfall, the county has spread budget cuts across its approximately 50 agencies and departments.



"I think that this is rather telling about the insignificance of tax rates," said Charles Hoskins, county treasurer. "Rates have increased because values have dropped more than spending, but the reduced spending is what ultimately determines what property owners pay."



This year's tax bills are based on 2009's valuations, when Valley home prices dropped a median of 15.2 percent. That was the third consecutive drop for home valuations in Maricopa County. Next year's property taxes will be based on 2010 valuations, which showed home values fell 11 percent.



Last year, county property-tax assessments were down 3.7 percent from 2009. But not every homeowner saw a decrease in his tax bills during 2010 because several municipalities and special districts had to raise their tax rates to offset budget shortfalls.



This year, Hoskins expects most homeowners to see a decrease.



Although tax bills are declining, the drop isn't nearly as much as the plunge in home prices, which have tumbled about 60 percent since 2006.



And Kevin McCarthy, president of the Arizona Tax Research Association, cautioned that not all homeowners' tax bills will drop. It will depend on how much their respective school districts and cities raise tax rates. School districts are expected to raise taxes this year, he said. On average, property taxes from school districts make up 61 percent of a homeowner's tax bill.



A homeowner living in Glendale Elementary School District whose property was assessed at the median value of $140,000 for last year's taxes and $124,500 for this year's may pay $76 more this tax year.



But the owner of an equivalent home in the Isaac School District in Phoenix may pay $99 less.



Both cities kept their tax rates flat, and both school districts increased their rates, but because the increase was smaller in Isaac, the total tax bill decreases.



"A blanket statement about everybody's taxes in the county going down will be problematic on that level," McCarthy said. "The things that might be driving some softening of the tax bill at the county level are not going to occur at the school-district level and, to a lesser extent, at a city level."



Tax system



Property values are assessed annually, and county tax bills based on those assessments arrive 18 months later.



The bills are based on a formula based on two factors: property valuations set by the assessor and tax rates set by nearly 1,500 municipalities and other tax jurisdictions.



Those jurisdictions - counties, cities, school districts, community-college districts and other special districts - determine the actual tax load for any given home.



A tax bill is a composite of the taxes assessed by those many different districts. A home that is inside a certain parks district, for example, may pay higher taxes than an identical home nearby that lies outside district lines.



To set rates, the taxing jurisdictions must first figure out how much money they need to fund their budgets.



Then, the district and municipalities work backward to set their tax rate. Under this system, a decline in value without an equal drop in a jurisdiction's budget will cause tax rates and taxes to go up.



All jurisdictions have a legal cap on how much they can raise tax rates, which is mandated when they are formed.



But districts can take a larger amount through local bond issues or voter-approved school-funding increases called budget overrides. This year, Hoskins said $1 out of every $5 assessed for property taxes will go toward voter-approved budget overrides and debt payments.



Homeowners' tax bills show which taxing jurisdictions are contributing to their total assessment.



The total assessed tax for all Maricopa County homeowners from all taxing districts is $3.9 billion this year. That compares with $4.2 billion last year and $4.3 billion in 2009.



Tax trends



Tax consultants believe Maricopa County has one of the most complicated property-taxing systems in the country. However, property-tax reform doesn't draw as much support in Arizona as other parts of the nation because the state has one of the lowest tax rates.



Arizona has the 39th-lowest property-tax rate in America, according to the Tax Foundation, a Washington, D.C.-based non-profit.



McCarthy said although that may be the case for residential homes, Arizona ranks about 16th-highest state in commercial- and industrial-tax rates.



The residential-home market may have bottomed out, but the commercial market still has room to decline, and business taxpayers are still seeing tax increases, he said.



"We have low homeowner property taxes, and we have high business-property taxes because we don't generate property taxes from homeowners on an even basis like most states," McCarthy said.



by Catherine Reagor and Michelle Ye Hee Lee The Arizona Republic Aug. 30, 2011 12:00 AM







Most Maricopa County homeowners to receive property-tax cut

Mortgage rates are low, but no rush

Low interest rates are opening up refinancing opportunities, but you shouldn't feel any need to rush into a loan application.

With a sluggish economy and an accommodating Federal Reserve, mortgage rates could remain low for at least another couple of years, said Greg McBride, a senior financial analyst at Bankrate.com.

Still, refinancing could make sense if you can shave your interest rate by at least 0.5 to 0.75 of a percentage point, he said.

"About 80 percent of mortgage applications now are for refinancings," he said. "Activity really picked up earlier this month, when rates (for 30-year fixed loans) dropped below 4 percent."

Even as low rates beckon, not everyone can take advantage of them.

"The biggest problem that people are running into are (low) appraised values," said Amy Swaney, a senior loan officer at Citywide Home Loans in Phoenix. Before starting the application process, she suggests checking to see what your home is worth by contacting a real-estate agent, rather than relying on an online site whose estimates could be way off base.

One rule of thumb is to consider refinancing if you can recoup your expenses within two or three years, McBride suggests. You can calculate that by dividing closing costs by the annual savings, in decreased payments, from a new loan.

Swaney said she believed refinancing only made sense if you could shave at least 5 percent from your monthly payment - for example, going from a $1,000 payment to $950 or less. This assumes you're staying with the same type of loan.

But she also suggests that borrowers consider moving into a shorter loan, such as one with a 15- or 20-year term, for people who can afford to do so since they stand to save so much interest over time.

McBride sees three main groups of homeowners who can benefit from refinancing: those obtaining a lower rate, those moving from an adjustable-rate mortgage to a fixed loan and those converting from a jumbo mortgage to a conforming loan, which carry lower rates anyway.

If you want to refinance but have suffered an equity loss due to falling home prices, the Home Affordable Refinancing Program (HARP) might help.

"It's geared to people who have been making their payments on time," McBride said. Through HARP, homeowners can qualify for refinancing even on loans that are up to 25 percent higher than a home's value.

Swaney also likes HARP but cautions that some borrowers will have trouble qualifying.

- With mortgage rates so low, you would think they'd all be clustering together. But in fact, that's not the case, according to LendingTree.com.

Lenders on the company's network are quoting interest rates that vary noticeably. On Tuesday, for example, average 30-year fixed home-loan rates carried an average annual percentage rate (APR) of 4.58 percent and 3.97 percent for 15-year loans. But the lowest quoted rates were 3.88 percent for 30-year mortgages and 3.22 percent for the 15-year variety.

"We're seeing an increase not only in interest rates, but also in pricing disparity between lenders, which means it's more important than ever to shop around for your loan," said Mona Marimow, a company senior vice president.

Money notes

- American companies don't rate too highly on a new list of the world's 50 safest banks from Global Finance magazine.

Only six U.S. banks make the list, and just one is in the top half - No. 24 BNY Mellon. Those further down include JPMorgan Chase (34), Wells Fargo (36), U.S. Bancorp (40), Northern Trust (44) and CoBank (45).

The study analyzed banks based on assets and long-term credit ratings from Standard & Poor's, Moody's Investors Service and Fitch. Successful banks also tended to have improving balance sheets and declining volumes of non-performing loans.

Germany's KfW is the top-ranked bank in the study, followed by France's Caisse des Depots et Consignations and Holland's Bank Nederlandse Gemeenten. Despite European government debt woes, European banks occupy the top nine places. Some foreign banks cited in the study operate in Arizona, such as Spain's BBVA, No. 17 overall, parent of BBVA Compass Bank.

- Most small-business owners are trying to run things efficiently, but many are overlooking certain money-saving tips. Among them: using direct deposits for payroll.

Companies face costs of up to $2 to write and process each paper check, compared with 35 cents or less for direct deposits, according to NACHA, the Electronic Payments Association. That can equate to savings of around $40 per employee annually, assuming biweekly pay.

A recent NACHA survey of small-business owners revealed that 66 percent don't use direct deposit for payroll. It's especially rare for many companies operating in fields such as repair/maintenance, food service, retail and construction.

Of companies that offer direct deposit, only one in three can point to 100 percent employee participation. Direct deposit also can help by sparing business owners the need to visit their banks as much and by reducing the volume of paper checks to vendors.

by Russ Wiles The Arizona Republic Aug. 28, 2011 12:00 AM




Mortgage rates are low, but no rush

Mortgage rates are low, but no rush

Low interest rates are opening up refinancing opportunities, but you shouldn't feel any need to rush into a loan application.



With a sluggish economy and an accommodating Federal Reserve, mortgage rates could remain low for at least another couple of years, said Greg McBride, a senior financial analyst at Bankrate.com.



Still, refinancing could make sense if you can shave your interest rate by at least 0.5 to 0.75 of a percentage point, he said.



"About 80 percent of mortgage applications now are for refinancings," he said. "Activity really picked up earlier this month, when rates (for 30-year fixed loans) dropped below 4 percent."



Even as low rates beckon, not everyone can take advantage of them.



"The biggest problem that people are running into are (low) appraised values," said Amy Swaney, a senior loan officer at Citywide Home Loans in Phoenix. Before starting the application process, she suggests checking to see what your home is worth by contacting a real-estate agent, rather than relying on an online site whose estimates could be way off base.



One rule of thumb is to consider refinancing if you can recoup your expenses within two or three years, McBride suggests. You can calculate that by dividing closing costs by the annual savings, in decreased payments, from a new loan.



Swaney said she believed refinancing only made sense if you could shave at least 5 percent from your monthly payment - for example, going from a $1,000 payment to $950 or less. This assumes you're staying with the same type of loan.



But she also suggests that borrowers consider moving into a shorter loan, such as one with a 15- or 20-year term, for people who can afford to do so since they stand to save so much interest over time.



McBride sees three main groups of homeowners who can benefit from refinancing: those obtaining a lower rate, those moving from an adjustable-rate mortgage to a fixed loan and those converting from a jumbo mortgage to a conforming loan, which carry lower rates anyway.



If you want to refinance but have suffered an equity loss due to falling home prices, the Home Affordable Refinancing Program (HARP) might help.



"It's geared to people who have been making their payments on time," McBride said. Through HARP, homeowners can qualify for refinancing even on loans that are up to 25 percent higher than a home's value.



Swaney also likes HARP but cautions that some borrowers will have trouble qualifying.



- With mortgage rates so low, you would think they'd all be clustering together. But in fact, that's not the case, according to LendingTree.com.



Lenders on the company's network are quoting interest rates that vary noticeably. On Tuesday, for example, average 30-year fixed home-loan rates carried an average annual percentage rate (APR) of 4.58 percent and 3.97 percent for 15-year loans. But the lowest quoted rates were 3.88 percent for 30-year mortgages and 3.22 percent for the 15-year variety.



"We're seeing an increase not only in interest rates, but also in pricing disparity between lenders, which means it's more important than ever to shop around for your loan," said Mona Marimow, a company senior vice president.



Money notes



- American companies don't rate too highly on a new list of the world's 50 safest banks from Global Finance magazine.



Only six U.S. banks make the list, and just one is in the top half - No. 24 BNY Mellon. Those further down include JPMorgan Chase (34), Wells Fargo (36), U.S. Bancorp (40), Northern Trust (44) and CoBank (45).



The study analyzed banks based on assets and long-term credit ratings from Standard & Poor's, Moody's Investors Service and Fitch. Successful banks also tended to have improving balance sheets and declining volumes of non-performing loans.



Germany's KfW is the top-ranked bank in the study, followed by France's Caisse des Depots et Consignations and Holland's Bank Nederlandse Gemeenten. Despite European government debt woes, European banks occupy the top nine places. Some foreign banks cited in the study operate in Arizona, such as Spain's BBVA, No. 17 overall, parent of BBVA Compass Bank.



- Most small-business owners are trying to run things efficiently, but many are overlooking certain money-saving tips. Among them: using direct deposits for payroll.



Companies face costs of up to $2 to write and process each paper check, compared with 35 cents or less for direct deposits, according to NACHA, the Electronic Payments Association. That can equate to savings of around $40 per employee annually, assuming biweekly pay.



A recent NACHA survey of small-business owners revealed that 66 percent don't use direct deposit for payroll. It's especially rare for many companies operating in fields such as repair/maintenance, food service, retail and construction.



Of companies that offer direct deposit, only one in three can point to 100 percent employee participation. Direct deposit also can help by sparing business owners the need to visit their banks as much and by reducing the volume of paper checks to vendors.



by Russ Wiles The Arizona Republic Aug. 28, 2011 12:00 AM







Mortgage rates are low, but no rush

Mortgage rates are low, but no rush

Low interest rates are opening up refinancing opportunities, but you shouldn't feel any need to rush into a loan application.



With a sluggish economy and an accommodating Federal Reserve, mortgage rates could remain low for at least another couple of years, said Greg McBride, a senior financial analyst at Bankrate.com.



Still, refinancing could make sense if you can shave your interest rate by at least 0.5 to 0.75 of a percentage point, he said.



"About 80 percent of mortgage applications now are for refinancings," he said. "Activity really picked up earlier this month, when rates (for 30-year fixed loans) dropped below 4 percent."



Even as low rates beckon, not everyone can take advantage of them.



"The biggest problem that people are running into are (low) appraised values," said Amy Swaney, a senior loan officer at Citywide Home Loans in Phoenix. Before starting the application process, she suggests checking to see what your home is worth by contacting a real-estate agent, rather than relying on an online site whose estimates could be way off base.



One rule of thumb is to consider refinancing if you can recoup your expenses within two or three years, McBride suggests. You can calculate that by dividing closing costs by the annual savings, in decreased payments, from a new loan.



Swaney said she believed refinancing only made sense if you could shave at least 5 percent from your monthly payment - for example, going from a $1,000 payment to $950 or less. This assumes you're staying with the same type of loan.



But she also suggests that borrowers consider moving into a shorter loan, such as one with a 15- or 20-year term, for people who can afford to do so since they stand to save so much interest over time.



McBride sees three main groups of homeowners who can benefit from refinancing: those obtaining a lower rate, those moving from an adjustable-rate mortgage to a fixed loan and those converting from a jumbo mortgage to a conforming loan, which carry lower rates anyway.



If you want to refinance but have suffered an equity loss due to falling home prices, the Home Affordable Refinancing Program (HARP) might help.



"It's geared to people who have been making their payments on time," McBride said. Through HARP, homeowners can qualify for refinancing even on loans that are up to 25 percent higher than a home's value.



Swaney also likes HARP but cautions that some borrowers will have trouble qualifying.



- With mortgage rates so low, you would think they'd all be clustering together. But in fact, that's not the case, according to LendingTree.com.



Lenders on the company's network are quoting interest rates that vary noticeably. On Tuesday, for example, average 30-year fixed home-loan rates carried an average annual percentage rate (APR) of 4.58 percent and 3.97 percent for 15-year loans. But the lowest quoted rates were 3.88 percent for 30-year mortgages and 3.22 percent for the 15-year variety.



"We're seeing an increase not only in interest rates, but also in pricing disparity between lenders, which means it's more important than ever to shop around for your loan," said Mona Marimow, a company senior vice president.



Money notes



- American companies don't rate too highly on a new list of the world's 50 safest banks from Global Finance magazine.



Only six U.S. banks make the list, and just one is in the top half - No. 24 BNY Mellon. Those further down include JPMorgan Chase (34), Wells Fargo (36), U.S. Bancorp (40), Northern Trust (44) and CoBank (45).



The study analyzed banks based on assets and long-term credit ratings from Standard & Poor's, Moody's Investors Service and Fitch. Successful banks also tended to have improving balance sheets and declining volumes of non-performing loans.



Germany's KfW is the top-ranked bank in the study, followed by France's Caisse des Depots et Consignations and Holland's Bank Nederlandse Gemeenten. Despite European government debt woes, European banks occupy the top nine places. Some foreign banks cited in the study operate in Arizona, such as Spain's BBVA, No. 17 overall, parent of BBVA Compass Bank.



- Most small-business owners are trying to run things efficiently, but many are overlooking certain money-saving tips. Among them: using direct deposits for payroll.



Companies face costs of up to $2 to write and process each paper check, compared with 35 cents or less for direct deposits, according to NACHA, the Electronic Payments Association. That can equate to savings of around $40 per employee annually, assuming biweekly pay.



A recent NACHA survey of small-business owners revealed that 66 percent don't use direct deposit for payroll. It's especially rare for many companies operating in fields such as repair/maintenance, food service, retail and construction.



Of companies that offer direct deposit, only one in three can point to 100 percent employee participation. Direct deposit also can help by sparing business owners the need to visit their banks as much and by reducing the volume of paper checks to vendors.



by Russ Wiles The Arizona Republic Aug. 28, 2011 12:00 AM







Mortgage rates are low, but no rush

Mortgage rates are low, but no rush

Low interest rates are opening up refinancing opportunities, but you shouldn't feel any need to rush into a loan application.



With a sluggish economy and an accommodating Federal Reserve, mortgage rates could remain low for at least another couple of years, said Greg McBride, a senior financial analyst at Bankrate.com.



Still, refinancing could make sense if you can shave your interest rate by at least 0.5 to 0.75 of a percentage point, he said.



"About 80 percent of mortgage applications now are for refinancings," he said. "Activity really picked up earlier this month, when rates (for 30-year fixed loans) dropped below 4 percent."



Even as low rates beckon, not everyone can take advantage of them.



"The biggest problem that people are running into are (low) appraised values," said Amy Swaney, a senior loan officer at Citywide Home Loans in Phoenix. Before starting the application process, she suggests checking to see what your home is worth by contacting a real-estate agent, rather than relying on an online site whose estimates could be way off base.



One rule of thumb is to consider refinancing if you can recoup your expenses within two or three years, McBride suggests. You can calculate that by dividing closing costs by the annual savings, in decreased payments, from a new loan.



Swaney said she believed refinancing only made sense if you could shave at least 5 percent from your monthly payment - for example, going from a $1,000 payment to $950 or less. This assumes you're staying with the same type of loan.



But she also suggests that borrowers consider moving into a shorter loan, such as one with a 15- or 20-year term, for people who can afford to do so since they stand to save so much interest over time.



McBride sees three main groups of homeowners who can benefit from refinancing: those obtaining a lower rate, those moving from an adjustable-rate mortgage to a fixed loan and those converting from a jumbo mortgage to a conforming loan, which carry lower rates anyway.



If you want to refinance but have suffered an equity loss due to falling home prices, the Home Affordable Refinancing Program (HARP) might help.



"It's geared to people who have been making their payments on time," McBride said. Through HARP, homeowners can qualify for refinancing even on loans that are up to 25 percent higher than a home's value.



Swaney also likes HARP but cautions that some borrowers will have trouble qualifying.



- With mortgage rates so low, you would think they'd all be clustering together. But in fact, that's not the case, according to LendingTree.com.



Lenders on the company's network are quoting interest rates that vary noticeably. On Tuesday, for example, average 30-year fixed home-loan rates carried an average annual percentage rate (APR) of 4.58 percent and 3.97 percent for 15-year loans. But the lowest quoted rates were 3.88 percent for 30-year mortgages and 3.22 percent for the 15-year variety.



"We're seeing an increase not only in interest rates, but also in pricing disparity between lenders, which means it's more important than ever to shop around for your loan," said Mona Marimow, a company senior vice president.



Money notes



- American companies don't rate too highly on a new list of the world's 50 safest banks from Global Finance magazine.



Only six U.S. banks make the list, and just one is in the top half - No. 24 BNY Mellon. Those further down include JPMorgan Chase (34), Wells Fargo (36), U.S. Bancorp (40), Northern Trust (44) and CoBank (45).



The study analyzed banks based on assets and long-term credit ratings from Standard & Poor's, Moody's Investors Service and Fitch. Successful banks also tended to have improving balance sheets and declining volumes of non-performing loans.



Germany's KfW is the top-ranked bank in the study, followed by France's Caisse des Depots et Consignations and Holland's Bank Nederlandse Gemeenten. Despite European government debt woes, European banks occupy the top nine places. Some foreign banks cited in the study operate in Arizona, such as Spain's BBVA, No. 17 overall, parent of BBVA Compass Bank.



- Most small-business owners are trying to run things efficiently, but many are overlooking certain money-saving tips. Among them: using direct deposits for payroll.



Companies face costs of up to $2 to write and process each paper check, compared with 35 cents or less for direct deposits, according to NACHA, the Electronic Payments Association. That can equate to savings of around $40 per employee annually, assuming biweekly pay.



A recent NACHA survey of small-business owners revealed that 66 percent don't use direct deposit for payroll. It's especially rare for many companies operating in fields such as repair/maintenance, food service, retail and construction.



Of companies that offer direct deposit, only one in three can point to 100 percent employee participation. Direct deposit also can help by sparing business owners the need to visit their banks as much and by reducing the volume of paper checks to vendors.



by Russ Wiles The Arizona Republic Aug. 28, 2011 12:00 AM







Mortgage rates are low, but no rush

Mortgage rates are low, but no rush

Low interest rates are opening up refinancing opportunities, but you shouldn't feel any need to rush into a loan application.



With a sluggish economy and an accommodating Federal Reserve, mortgage rates could remain low for at least another couple of years, said Greg McBride, a senior financial analyst at Bankrate.com.



Still, refinancing could make sense if you can shave your interest rate by at least 0.5 to 0.75 of a percentage point, he said.



"About 80 percent of mortgage applications now are for refinancings," he said. "Activity really picked up earlier this month, when rates (for 30-year fixed loans) dropped below 4 percent."



Even as low rates beckon, not everyone can take advantage of them.



"The biggest problem that people are running into are (low) appraised values," said Amy Swaney, a senior loan officer at Citywide Home Loans in Phoenix. Before starting the application process, she suggests checking to see what your home is worth by contacting a real-estate agent, rather than relying on an online site whose estimates could be way off base.



One rule of thumb is to consider refinancing if you can recoup your expenses within two or three years, McBride suggests. You can calculate that by dividing closing costs by the annual savings, in decreased payments, from a new loan.



Swaney said she believed refinancing only made sense if you could shave at least 5 percent from your monthly payment - for example, going from a $1,000 payment to $950 or less. This assumes you're staying with the same type of loan.



But she also suggests that borrowers consider moving into a shorter loan, such as one with a 15- or 20-year term, for people who can afford to do so since they stand to save so much interest over time.



McBride sees three main groups of homeowners who can benefit from refinancing: those obtaining a lower rate, those moving from an adjustable-rate mortgage to a fixed loan and those converting from a jumbo mortgage to a conforming loan, which carry lower rates anyway.



If you want to refinance but have suffered an equity loss due to falling home prices, the Home Affordable Refinancing Program (HARP) might help.



"It's geared to people who have been making their payments on time," McBride said. Through HARP, homeowners can qualify for refinancing even on loans that are up to 25 percent higher than a home's value.



Swaney also likes HARP but cautions that some borrowers will have trouble qualifying.



- With mortgage rates so low, you would think they'd all be clustering together. But in fact, that's not the case, according to LendingTree.com.



Lenders on the company's network are quoting interest rates that vary noticeably. On Tuesday, for example, average 30-year fixed home-loan rates carried an average annual percentage rate (APR) of 4.58 percent and 3.97 percent for 15-year loans. But the lowest quoted rates were 3.88 percent for 30-year mortgages and 3.22 percent for the 15-year variety.



"We're seeing an increase not only in interest rates, but also in pricing disparity between lenders, which means it's more important than ever to shop around for your loan," said Mona Marimow, a company senior vice president.



Money notes



- American companies don't rate too highly on a new list of the world's 50 safest banks from Global Finance magazine.



Only six U.S. banks make the list, and just one is in the top half - No. 24 BNY Mellon. Those further down include JPMorgan Chase (34), Wells Fargo (36), U.S. Bancorp (40), Northern Trust (44) and CoBank (45).



The study analyzed banks based on assets and long-term credit ratings from Standard & Poor's, Moody's Investors Service and Fitch. Successful banks also tended to have improving balance sheets and declining volumes of non-performing loans.



Germany's KfW is the top-ranked bank in the study, followed by France's Caisse des Depots et Consignations and Holland's Bank Nederlandse Gemeenten. Despite European government debt woes, European banks occupy the top nine places. Some foreign banks cited in the study operate in Arizona, such as Spain's BBVA, No. 17 overall, parent of BBVA Compass Bank.



- Most small-business owners are trying to run things efficiently, but many are overlooking certain money-saving tips. Among them: using direct deposits for payroll.



Companies face costs of up to $2 to write and process each paper check, compared with 35 cents or less for direct deposits, according to NACHA, the Electronic Payments Association. That can equate to savings of around $40 per employee annually, assuming biweekly pay.



A recent NACHA survey of small-business owners revealed that 66 percent don't use direct deposit for payroll. It's especially rare for many companies operating in fields such as repair/maintenance, food service, retail and construction.



Of companies that offer direct deposit, only one in three can point to 100 percent employee participation. Direct deposit also can help by sparing business owners the need to visit their banks as much and by reducing the volume of paper checks to vendors.



by Russ Wiles The Arizona Republic Aug. 28, 2011 12:00 AM







Mortgage rates are low, but no rush

Mortgage rates are low, but no rush

Low interest rates are opening up refinancing opportunities, but you shouldn't feel any need to rush into a loan application.



With a sluggish economy and an accommodating Federal Reserve, mortgage rates could remain low for at least another couple of years, said Greg McBride, a senior financial analyst at Bankrate.com.



Still, refinancing could make sense if you can shave your interest rate by at least 0.5 to 0.75 of a percentage point, he said.



"About 80 percent of mortgage applications now are for refinancings," he said. "Activity really picked up earlier this month, when rates (for 30-year fixed loans) dropped below 4 percent."



Even as low rates beckon, not everyone can take advantage of them.



"The biggest problem that people are running into are (low) appraised values," said Amy Swaney, a senior loan officer at Citywide Home Loans in Phoenix. Before starting the application process, she suggests checking to see what your home is worth by contacting a real-estate agent, rather than relying on an online site whose estimates could be way off base.



One rule of thumb is to consider refinancing if you can recoup your expenses within two or three years, McBride suggests. You can calculate that by dividing closing costs by the annual savings, in decreased payments, from a new loan.



Swaney said she believed refinancing only made sense if you could shave at least 5 percent from your monthly payment - for example, going from a $1,000 payment to $950 or less. This assumes you're staying with the same type of loan.



But she also suggests that borrowers consider moving into a shorter loan, such as one with a 15- or 20-year term, for people who can afford to do so since they stand to save so much interest over time.



McBride sees three main groups of homeowners who can benefit from refinancing: those obtaining a lower rate, those moving from an adjustable-rate mortgage to a fixed loan and those converting from a jumbo mortgage to a conforming loan, which carry lower rates anyway.



If you want to refinance but have suffered an equity loss due to falling home prices, the Home Affordable Refinancing Program (HARP) might help.



"It's geared to people who have been making their payments on time," McBride said. Through HARP, homeowners can qualify for refinancing even on loans that are up to 25 percent higher than a home's value.



Swaney also likes HARP but cautions that some borrowers will have trouble qualifying.



- With mortgage rates so low, you would think they'd all be clustering together. But in fact, that's not the case, according to LendingTree.com.



Lenders on the company's network are quoting interest rates that vary noticeably. On Tuesday, for example, average 30-year fixed home-loan rates carried an average annual percentage rate (APR) of 4.58 percent and 3.97 percent for 15-year loans. But the lowest quoted rates were 3.88 percent for 30-year mortgages and 3.22 percent for the 15-year variety.



"We're seeing an increase not only in interest rates, but also in pricing disparity between lenders, which means it's more important than ever to shop around for your loan," said Mona Marimow, a company senior vice president.



Money notes



- American companies don't rate too highly on a new list of the world's 50 safest banks from Global Finance magazine.



Only six U.S. banks make the list, and just one is in the top half - No. 24 BNY Mellon. Those further down include JPMorgan Chase (34), Wells Fargo (36), U.S. Bancorp (40), Northern Trust (44) and CoBank (45).



The study analyzed banks based on assets and long-term credit ratings from Standard & Poor's, Moody's Investors Service and Fitch. Successful banks also tended to have improving balance sheets and declining volumes of non-performing loans.



Germany's KfW is the top-ranked bank in the study, followed by France's Caisse des Depots et Consignations and Holland's Bank Nederlandse Gemeenten. Despite European government debt woes, European banks occupy the top nine places. Some foreign banks cited in the study operate in Arizona, such as Spain's BBVA, No. 17 overall, parent of BBVA Compass Bank.



- Most small-business owners are trying to run things efficiently, but many are overlooking certain money-saving tips. Among them: using direct deposits for payroll.



Companies face costs of up to $2 to write and process each paper check, compared with 35 cents or less for direct deposits, according to NACHA, the Electronic Payments Association. That can equate to savings of around $40 per employee annually, assuming biweekly pay.



A recent NACHA survey of small-business owners revealed that 66 percent don't use direct deposit for payroll. It's especially rare for many companies operating in fields such as repair/maintenance, food service, retail and construction.



Of companies that offer direct deposit, only one in three can point to 100 percent employee participation. Direct deposit also can help by sparing business owners the need to visit their banks as much and by reducing the volume of paper checks to vendors.



by Russ Wiles The Arizona Republic Aug. 28, 2011 12:00 AM







Mortgage rates are low, but no rush

Mortgage rates are low, but no rush

Low interest rates are opening up refinancing opportunities, but you shouldn't feel any need to rush into a loan application.



With a sluggish economy and an accommodating Federal Reserve, mortgage rates could remain low for at least another couple of years, said Greg McBride, a senior financial analyst at Bankrate.com.



Still, refinancing could make sense if you can shave your interest rate by at least 0.5 to 0.75 of a percentage point, he said.



"About 80 percent of mortgage applications now are for refinancings," he said. "Activity really picked up earlier this month, when rates (for 30-year fixed loans) dropped below 4 percent."



Even as low rates beckon, not everyone can take advantage of them.



"The biggest problem that people are running into are (low) appraised values," said Amy Swaney, a senior loan officer at Citywide Home Loans in Phoenix. Before starting the application process, she suggests checking to see what your home is worth by contacting a real-estate agent, rather than relying on an online site whose estimates could be way off base.



One rule of thumb is to consider refinancing if you can recoup your expenses within two or three years, McBride suggests. You can calculate that by dividing closing costs by the annual savings, in decreased payments, from a new loan.



Swaney said she believed refinancing only made sense if you could shave at least 5 percent from your monthly payment - for example, going from a $1,000 payment to $950 or less. This assumes you're staying with the same type of loan.



But she also suggests that borrowers consider moving into a shorter loan, such as one with a 15- or 20-year term, for people who can afford to do so since they stand to save so much interest over time.



McBride sees three main groups of homeowners who can benefit from refinancing: those obtaining a lower rate, those moving from an adjustable-rate mortgage to a fixed loan and those converting from a jumbo mortgage to a conforming loan, which carry lower rates anyway.



If you want to refinance but have suffered an equity loss due to falling home prices, the Home Affordable Refinancing Program (HARP) might help.



"It's geared to people who have been making their payments on time," McBride said. Through HARP, homeowners can qualify for refinancing even on loans that are up to 25 percent higher than a home's value.



Swaney also likes HARP but cautions that some borrowers will have trouble qualifying.



- With mortgage rates so low, you would think they'd all be clustering together. But in fact, that's not the case, according to LendingTree.com.



Lenders on the company's network are quoting interest rates that vary noticeably. On Tuesday, for example, average 30-year fixed home-loan rates carried an average annual percentage rate (APR) of 4.58 percent and 3.97 percent for 15-year loans. But the lowest quoted rates were 3.88 percent for 30-year mortgages and 3.22 percent for the 15-year variety.



"We're seeing an increase not only in interest rates, but also in pricing disparity between lenders, which means it's more important than ever to shop around for your loan," said Mona Marimow, a company senior vice president.



Money notes



- American companies don't rate too highly on a new list of the world's 50 safest banks from Global Finance magazine.



Only six U.S. banks make the list, and just one is in the top half - No. 24 BNY Mellon. Those further down include JPMorgan Chase (34), Wells Fargo (36), U.S. Bancorp (40), Northern Trust (44) and CoBank (45).



The study analyzed banks based on assets and long-term credit ratings from Standard & Poor's, Moody's Investors Service and Fitch. Successful banks also tended to have improving balance sheets and declining volumes of non-performing loans.



Germany's KfW is the top-ranked bank in the study, followed by France's Caisse des Depots et Consignations and Holland's Bank Nederlandse Gemeenten. Despite European government debt woes, European banks occupy the top nine places. Some foreign banks cited in the study operate in Arizona, such as Spain's BBVA, No. 17 overall, parent of BBVA Compass Bank.



- Most small-business owners are trying to run things efficiently, but many are overlooking certain money-saving tips. Among them: using direct deposits for payroll.



Companies face costs of up to $2 to write and process each paper check, compared with 35 cents or less for direct deposits, according to NACHA, the Electronic Payments Association. That can equate to savings of around $40 per employee annually, assuming biweekly pay.



A recent NACHA survey of small-business owners revealed that 66 percent don't use direct deposit for payroll. It's especially rare for many companies operating in fields such as repair/maintenance, food service, retail and construction.



Of companies that offer direct deposit, only one in three can point to 100 percent employee participation. Direct deposit also can help by sparing business owners the need to visit their banks as much and by reducing the volume of paper checks to vendors.



by Russ Wiles The Arizona Republic Aug. 28, 2011 12:00 AM







Mortgage rates are low, but no rush

Phoenix real-estate market a confusing environment

Recent reports say foreclosures are declining in metro Phoenix and large numbers of homes are selling.

But many homeowners feel trapped in houses they can't sell.

Some real-estate agents can't find enough new listings to keep up with demand from buyers.

But others say there aren't enough buyers, and homes are selling too slowly.

The housing market in metro Phoenix may never have been as confusing as it is today.

Nearly five years after the beginning of the housing crash, the region's market has fractured into countless different niches.

Each niche is defined by who's selling, what kind of home is for sale and where the home is located.

And each niche has become a market of its own.

Some - such as the market for small central Phoenix foreclosure homes being sold at auction - are booming, with prices rising and a huge demand from buyers.

Others - for example, traditional resales of newer large family homes in some neighborhoods in the far west or southeast Valley - have ground to a halt, where homes seemingly won't sell at any price.

Location is one traditional factor in a home's value that still holds true. But in this market, its effect can be extreme. A seller in one neighborhood might receive 10 offers, while the owner of a similar house 5 miles away won't receive any.

In a market this splintered, once-reliable measurements just don't provide enough information for buyers or sellers.

One reliable measure of real-estate activity was the number of homes for sale. Traditionally, 20,000 to 25,000 homes on the market at any given time was considered normal. More than that meant an oversupply, and sellers might have trouble attracting buyers. Fewer meant a limited supply, a seller's market with rising prices.

As the housing market crashed, too many homes had been built. The region's inventory soared to more than 60,000 homes for sale in 2007, and prices plunged.

Today, according to the online real- estate publication the Cromford Report, listings in metro Phoenix are at 27,400 and falling - traditionally, a sure sign of rising demand and rising prices to follow.

But agents and analysts see the same thing many homeowners feel. While some homes are selling easily, others simply won't.

"Phoenix's housing market is a mixed bag now," said Marcus Fleming, manager with the real-estate brokerage Redfin Phoenix. "There's a new normal for the market, but it's a weird one."

Who's selling

One factor that has a big effect on home sales is the nature of the seller.

To understand, consider just how much things have changed in the past decade.

In June 2001, there were about 10,000 home sales, according to the Information Market, a Phoenix firm that analyzes real-estate data. Of that total:

- 7,300 were regular resales between a homeowner and a buyer.

- 2,700 were new-home purchases.

- 82 houses sold at foreclosure auctions.

- One home was sold by Fannie Mae, the federal mortgage giant that backs lenders and takes over those homes when borrowers default.

Ten years later, during June 2011, there were just over 11,000 home sales in metro Phoenix. But the variety of sales was far wider:

- 3,684 were regular resales between a homeowner and a buyer.

- 540 were new-home purchases.

- 1,350 homes sold at foreclosure auctions on the Maricopa County courthouse steps.

- 1,255 houses were sold by lenders that foreclosed on them.

- 2,183 houses were sold by Fannie Mae and Freddie Mac.

- 1,822 homes were sold in short sales, in which lenders agree to let a homeowner sell for less than what is owed on the loan.

- 401 homes were sold by the federal departments of Veterans Affairs and Housing and Urban Development.

Because all of these kinds of home sales work in different ways, the market overall becomes more complicated.

Different categories

The different splinters in the market have each begun to work in their own ways, real-estate market watchers say. Some parts see a lot of sales but low prices; others, the opposite.

- Traditional resales: Fewer of these happen because of competition from cheaper foreclosures and short sales. The ones that sell best are in popular neighborhoods with good schools, near freeways and shopping centers. But the percentage of foreclosure homes listed for sale in metro Phoenix has dropped by 5 percent in the past year, so regular sellers have less competition and might soon find it more easy to sell.

- New-home sales: Homebuilding has slowed to a crawl in metro Phoenix as the market continues to sell the many houses built on speculation during the boom years. Even with low land prices, it's still hard for homebuilders to compete with the prices of foreclosure houses that were built less than five years ago.

- Foreclosure auctions: These have become very popular, and a large volume of homes sell at metro Phoenix trustee auction each month. But homes sell at auction for lower prices, and that makes the market's overall average sales price lower.

- Fannie Mae and Freddie Mac: Homes owned by these entities now dominate the metro area's market. But the agencies often change their policies on appraising, maintaining, renting and selling their houses, so some buyers and real-estate agents steer clear of the hassles of these deals.

"The government's role in the housing market is making things more confusing and bringing down prices," said Mary Gomez, a real-estate agent with RE/MAX Renaissance Realty.

- Short sales: This type of sale was rare a decade ago. Banks were reluctant to agree to them in the early part of the crash, but they have now become common. Because they're not a foreclosure sale, but also are not a traditional sale, the value of a short-sale transaction skews the overall market in ways that are hard to measure.

The bottom line: Today's market is complicated and can't be summed up as simply as in years past.

"Everyone is trying to figure out Phoenix's housing market now, but there's no one set of data that truly tells the story. All the regular models for tracking the market are broken now," said Tom Ruff of the Information Market. "There is not just one market in metro Phoenix anymore."

The effects

That confusion makes it especially hard for homeowners and homesellers to know what their houses are worth.

Traditionally, a home's value could be estimated from its "comps," comparable sales of nearby homes. Those offered an idea of the going price in a neighborhood and the price per square foot.

Today, a regular home sells for $112 a square foot. A house sold through short sale goes for an average of $72 a square foot. A bank-owned, Freddie Mac or Fannie Mae home sells for $61.50 a square foot. And foreclosure homes selling at auction are averaging $57 a square foot.

"Comps for properties are inconsistent and can be confusing," said Jennifer Hillier, an agent with the Scottsdale office of West USA Realty. "People just don't know what to believe anymore."

Measures of the overall market are harder to trust, too. Currently, metro Phoenix's overall median sales price is $124,000. But because many of the homes sold are foreclosure auctions - in which low-priced homes are common - that number could be seen as low. Other homes may be worth far more. But few of those homes are selling, so they're not represented in the median price.

"Home sales activity is still very concentrated at the bottom end of the market," said housing analyst Mike Orr, who publishes the Cromford Report.

What's selling now

"Homes in central Phoenix area priced under $100,000 are moving like gangbusters with very few homes remaining on the market for long," Hillier said. "I believe this is because of the location to jobs and public transportation" and because the low prices mean investors get a reasonable return, in the form of rent, on their cash investment.

Market watchers also say three- to four-bedroom homes in suburban neighborhoods with good schools are also selling fast to both regular homeowners and investors who want to rent them out, often to families who have lost similar homes to foreclosure.

The region's less-expensive neighborhoods experienced the crash first, and now high-end housing areas are feeling more pain because there are fewer buyers who can afford those houses.

Sales of homes in the million-dollar range have definitely slowed, said Walt Danley of the Phoenix office of Christies' International Real Estate. He said there are cash buyers looking for deals in Paradise Valley and north Scottsdale, but those deals bring prices down.

Some million-dollar homes also go to foreclosure auctions. Recently, a house in Paradise Valley that sold for $3.5 million in 2005 sold at auction for about $1 million.

But there are still homes in Paradise Valley and other high-end neighborhoods selling for prices just 20 percent lower than they sold during the market's peak. Other neighborhoods are also beginning to see homes sell for pre-boom prices from 2003-04, despite the fact the metro area's median home price is back to 1999's level.

"The one indicator we can still count on is location," Ruff said. "Homes in the right areas will continue to sell for the highest prices."

by Catherine Reagor The Arizona Republic Aug. 28, 2011 12:00 AM



Phoenix real-estate market a confusing environment

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