City Council

Scottsdale shifts property tax rates resulting in lower payment

Posted 6/25/20

Scottsdale homeowners will see a downtick in their property tax as City Council approved plans for a property tax levy for the coming fiscal year.

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City Council

Scottsdale shifts property tax rates resulting in lower payment

Posted

Scottsdale homeowners will see a downtick in their property tax as City Council approved plans for a property tax levy for the coming fiscal year.

The city hosted a Truth in Taxation hearing on June 16 and unanimously approved, by a roll call vote, the levy, which will return to council on June 30 as an ordinance for assessment. The City Council also solicited public comment on the matter but there was none.

The levy is two-fold. Property owners will see an increase in their primary property tax but a drop in their secondary property tax. This will work out to a combined rate of $1.0316 per $100 of assessed valuation, down from $1.0412 in the current fiscal year.

Scottsdale plans to increase its primary property tax levy to $34.9 million, which works out to a $2 million increase from the 2019-20 fiscal year. City staff say this increase is because of tort liability claim payments and new construction.

This increase works out to the primary property tax rate being $0.5273 per $100 in assessed value, up from $0.5198 the previous year.

The city plans to use this proposed tax levy to support General Fund activities such as police and fire protection; operation and maintenance of parks and libraries; and other general governmental functions. Scottsdale will also use it for about a $1.83 million repayment to the Risk Management Fund reserve for tort liability claim payments.

As for secondary property tax, the city is planning for a $400,000 increase from the 2019-20 fiscal year, setting the tax levy at $33.4 million. This increase is because of debt service payments.

Property owners, however, will see a drop in this tax rate because of increased property values. Owners pay $0.5214 per $100 in assessed value but will pay $0.5043 in the coming fiscal year.

City staff say secondary property tax is solely used for retiring the principal and interest of general obligation bonded indebtedness.

Overall, the city gets 10 cents of every dollar collected in property tax, which works out to 5 cents from both primary and secondary property tax. The rest of the amount goes to public schools, Maricopa County, community colleges and various special taxing districts.

Per Arizona Revised Statutes, cities must host a public hearing on any tax levy at least 14 days before the actual levy of the tax. Furthermore, state statute and the Scottsdale City Charter require a Truth in Taxation hearing if the proposed primary property tax levy exceeds the prior year’s levy except in cases of growth.

A Truth in Taxation hearing has more strict guidelines and requires the City Council to consider a motion to levy the increased property tax by a roll call vote.

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