How much will property taxes go up if ballot measures pass in Gilbert?
Posted
Tom Blodgett
It is the bottom line question for many people in ballot questions: How much will this affect taxes?
That question can be applied to three ballot questions in Gilbert this month: the town of Gilbert’s proposed $515 million streets, transportation and infrastructure bond; Higley USD’s proposed $95 million capital bond; and Chandler USD’s proposed 15% maintenance and operations override continuance.
The two factors involved in giving a practical answer to that question are the tax rate and property value.
In the case of the town’s bond and CUSD’s override, the secondary property tax rate is being maintained at $0.99 per $100 valuation for the town and $1.18 for CUSD. For Higley USD’s bond, the rate will go up from $1.44 to $1.58 per $100 valuation for one year, then return to $1.44 based on other debt being retired.
But what about value? To get a better idea, Community Impact Newspaper examined one property located in the town and Higley USD’s boundaries with an estimated market value of $525,000, which is the median price of a home in Gilbert, according to the Cromford Report, which provides detailed information on the Greater Phoenix residential resale market.
Figuring property tax
In the end, homes are not taxed on their market value but on their assessed limited property value as determined by the Maricopa County Assessor’s Office.
The assessor’s office determines a full cash value on the home—something like the market value—but it also determines the limited property value. While full cash value can go up with the market, the limited property value, or LPV, can only go up by 5% per year by state law.
An assessment ratio is then applied to the limited property value, according to the type of property. That ratio is 10% for a primary residence or a residential rental to get the assessed LPV. The tax rate is then applied to the assessed LPV to determine the tax owed.
Town of Gilbert bond
On the example $525,000 home, the limited property value was $253,221. The ratio of 10% brought the assessed LPV to $25,322.
The town’s secondary rate of $0.99 per $100 valuation applied to that would bring the town’s portion of a property tax bill to $250.69.
As values have been going up more than 5% per year in town, it can be anticipated that the limited property value on such a property will go up the maximum 5%, bringing the limited property value to $265,882 and the assessed LPV to $26,588.
Again applying the tax rate, the town's portion of the property tax bill would $263.22, an increase of $12.53 on the tax bill as a result. If a resident pays that as part of a mortgage payment, it would be $1.04 a month.
It should be noted that the limited property value potentially could increase 5% each year for the 20-year life of the bonds.
Chandler USD override
The example home is in the Higley USD boundaries, but if it were to be in the Chandler USD boundaries, the override’s portion of the tax bill would be $298.80.
After a 5% hike in the limited property value, the tax bill would go up to $313.74, an increase of $14.94 for the year or $1.25 a month.
Higley USD bond
A resident in the Higley USD would be paying $364.44 in 2021 on the example home on the bond.
In the following year, with the rate going up to $1.58 per $100 valuation and the home going up 5% in assessed LPV, the bill would be $420.09, an increase of $55.65 for the year or $4.64 per month.
Assuming in the following year the LPV increases another 5% to $279,176, the assessed LPV would become $27,918, but the tax rate would fall back to $1.44. The bill would be $402.02, a decrease of $18.07 for the year and $1.51 per month. But it would be an increase of $37.58 from what is being paid this year, or $3.13 per month.
Tax increases in totality
A resident living in that $525,000 example home in the HUSD boundaries could expect their tax bill to rise $68.18 in the first year between the two measures, or $5.68 a month.
If that home were in the CUSD boundaries, the increase would be $27.47, or $2.29 per month.
Gilbert Public Schools does not have a maintenance and operations override or a capital bond measure on the ballot. It actually anticipates a small tax rate decrease from its current override and bond from $6.26 to $6.03 per $100 valuation. After a 5% assessed LPV increase and including the town of Gilbert’s bond, the tax bill on such a home in the GPS boundaries would be about $31.03 more for the year, or $2.59 per month.
Ballots for the election must be postmarked by Oct. 26 or dropped off by Nov. 2.
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