Historical Context and Growth Challenges
- There was an incorporation attempt in 2010, one year after Supervisor Goodman moved to the area in 2009
- Multiple incorporation attempts have occurred over the years, but the effort has never slowed down
- The county’s infrastructure work has continued regardless of incorporation efforts, focusing on moving people in and out properly and safely
- They are in one of the fastest-growing counties in the country
- San Tan Valley alone is estimated to reach roughly 320,000 people by the year 2049
- Current county resources are spread very thinly on available dollars for roads and infrastructure
Property Tax: Common Concerns and Current Reality
- Many people ask whether property taxes will increase because of incorporation efforts
- Property tax increases could happen whether an area is county or municipality/city
- In 2012, the county was in a predicament with a budget deficit, as was everyone throughout the entire state, because of the economic downturn from 2008
- The county made cuts and then adjusted the property tax in 2012 to make up the difference
- Since 2012, there have been law changes so that many types of property tax increases require voter approval or public hearings
Property Tax Distribution and Usage
- It is a very low portion of the overall property tax that actually comes to the county
- County property tax is used for all the administrative costs including sheriff’s department, county attorney’s office, public works department, and some salaries
- None of the general fund property tax money goes toward the actual construction part of roads and infrastructure
- Property tax funding is totally separate from any kind of infrastructure and roads
- The remaining property tax revenue goes to high schools, schools, school districts, CAC College, and fire districts and water districts, if applicable
- The supervisor emphasized that not a dime of property tax goes to build roads and never has, and as long as he is in his position, he does not want to see that happen
- He believes it’s unfair for residents to pay for road construction since roads benefit developers and everyone coming to work in the area, and wants people to stop and eat at restaurants or get gas
Current Property Tax Breakdown
- 26% of total property tax dollars goes towards the county
- 7% goes to cities and towns (San Tan Valley gets none since it’s not a city, but incorporated areas get their portion of that 7%)
- 36% goes to school districts
- 14% goes to Central Arizona College
- 16% goes to special districts
Road and Infrastructure Investment History
- Over the last 10-plus years, approximately $200 million has been spent on roads and infrastructure in the San Tan Valley area, maybe a little bit more
- About 16% of these costs are for maintenance, with the rest being for new construction
- There has been a considerable amount of money spent in the San Tan Valley area when it comes to roads, and it’s beginning to show
- The supervisor drives around once a week to check on the progress and it makes him feel good about what’s going on
- Since 2017 when the supervisor has been in office, the county has been decreasing property tax rates from four point something to probably 3.36, and that’s pretty substantial
- The supervisor wants to see property taxes continue to drop and believes the other four board members are in the same mindset
Municipal Revenue Advantages
- The supervisor estimates that based on population projections, the new municipality could receive an estimated $55 to $60 million from shared revenues based on its population allocation
- Road construction money comes from shared revenues like sales tax, not property taxes
- These shared revenues come from sales tax and other sources, and that’s where the dollars come to help build roads
- The supervisor believes this is fairer because roads benefit all the developers and everyone coming out to work, and they want people to stop and eat at restaurants or get gas
Sales Tax Redistribution Issues
- There was previously a half-cent sales tax for new construction specifically, but it is no longer there
- The latest election approved a half-cent sales tax for maintenance
- Currently, the county receives its portion of this half-cent sales tax and uses it county-wide
- Other incorporated municipalities receive their portions based on their areas within the county: Queen Creek gets portions that they have in the county, and Apache Junction, Florence, Coolidge, Eloy, Casa Grande, and Maricopa all receive shares of that half-cent sales tax
- San Tan Valley doesn’t receive a share because the money goes to the county and is used county-wide
- If incorporated, San Tan Valley would receive their half-cent share based on population, just like the other municipalities
- San Tan Valley residents are already paying these sales tax dollars but are not benefiting from those dollars coming back to be used in their own roads and infrastructure
- The county receives the funds and uses them county-wide across a county that is the size of Connecticut with many roads
Property Tax Impact of Incorporation
- Property taxes will not decrease because of incorporation
- When it comes to property taxes for the county, they charge a property tax that is standard across the board
- If there is any change in property tax rates, it would apply countywide rather than only to San Tan Valley
- The county is required by law to provide certain services regardless of incorporation
- The Sheriff’s Department will still be required even if there is a local police department, similar to how the Maricopa County Sheriff continues to serve parts of Queen Creek that are within Maricopa County
- Elections are a big factor and there’s a lot of money that goes into elections
- Public health responsibilities will not change
- The county will still have road and maintenance departments and continue working with municipalities or internally as they’ve been doing
- They’ve already spent over $200 million over the last 10-plus years and will continue to do that
Comparison with Maricopa County Model
- Maricopa County has the lowest county property tax rate of all the counties in the state
- This is because they have the most commercial property in the state, which offsets residential property tax rates
- The more commercial and economic growth including sales tax tends to offset residential property tax
- Maricopa County’s property tax rate is around or slightly below one dollar per $100 of assessed value
- Maricopa County has done a very good job bringing industry into the region, with good airport systems and transportation infrastructure
- Maricopa County has a little over five million people, but only roughly 250,000 are in unincorporated Maricopa County
- Pinal County has roughly 250,000 unincorporated people
- In Maricopa County, most cities and municipalities provide local governance in each community rather than county supervisors
- This gives county supervisors a small footprint they’re responsible for
- Counties retain responsibility for public health and elections regardless of incorporation, unless changed legislatively
Key Financial Equity Argument
- Residents pay taxes, but the benefits are diluted across a county the size of Connecticut with many competing needs