By Mark Carlisle

Independent Newsmedia

City Council will not increase the city’s levy on Glendale residents’ property taxes, nor does it plan to in the near future.

Council made the unanimous decision during its Feb. 6 budget workshop with a provision that Council would revisit the issue annually for discussion. The decision also included a change to the language of city policy.The previous policy stated that the city would increase its primary property taxlevy by 2 percent each year — the maximum amount

allowable under state law. For the last several years, Council had opted out of that increase and instead kept the levy flat. In addition to forgoing the increase this year, Council changed the policy to say the levy would remain flat but review the item each year. There will be no binding language in the policy, however. The new policy will say the city can increase the levy at Council’s discretion.

Mayor Jerry Weiers said the benefit of previous language was that it ensured the issue come up every year.

“I actually don’t have a problem leaving the policy the way it is because I want to force the discussion every year, and if there’s a need for (an increase), then at least it comes up,” he said.

Instead, Council chose to continue revisiting the item each year, but changed the language from an intent to increase the levy to an intent to keep it flat.

Alongside a decision to revisit the issue, Councilwoman Joyce Clark of the Yucca District urged a declaration of intention to keep the rate flat to provide stability to Glendale residents and business owners, noting that Council could change its course if an increase became needed in the future.

“When you say you’re going to evaluate it every year, that puts everybody in limbo and leaves the door open for raising it once again,” she said. “So, I would be in favor of a policy that states that we will keep it flat. I suspect that if that policy became unworkable, staff would be the first one to tell us it wasn’t working.”

Glendale receives 18 percent of each Glendale resident’s property taxes; 65 percent goes to schools, 12 percent goes to the county and 6 percent goes to special districts. Glendale’s 18 percent is broken into two categories. The primary category, which receives 4 percent, goes into the general fund. The secondary category, 14 percent, goes into the debt service fund to service the city’s general obligation debt, such as money that has been allocated or mandated by voters in bond elections.

The 2 percent increase would be to the 4 percent — the primary tax levy that funnels into the general fund — equaling a revenue increase of $113,000 a year.

“When you weigh that against a $200 million revenue budget, it’s relatively small,” Assistant City Manager Tom Duensing said.

The general fund’s total revenues exceeded $205 million for fiscal year 2016-17.

Councilmembers agreed there was no need for the increase this year.

“It’s very small financially, but it’s a big thing with your voters,” Mayor Weiers said. “And that’s something that they will look at no matter what the amount is. If we can’t lower sales tax on food, we certainly don’t want to increase tax on this.”

Despite the language of the policy saying the city would enact a 2 percent increase each year, city staff has been planning differently. Because of Council’s decisions the past few years, the city’s five-year financial forecast breaks from the previous language of the financial policy and anticipates the levy remaining flat. After Council’s decision to change the language to project a flat rate, the policy now lines up with the five-year forecast.

The previous policy language was put in place by a past Council. Councilman Bart Turner of the Barrel District noted that though a 2 percent increase does not yield much revenue, the increases compound and

could begin yielding more substantial revenue in a few years.

“It wasn’t a one-year solution because the numbers aren’t big enough,” he said. “But if you raise it 2 percent one year, 2 percent the next, 2 percent the next, and that’s compounding on itself, eventually you reach a point to where the cumulative difference adds up to be $1 million, $2 million.”

A chart displayed by city staff demonstrated that had Glendale started to increase the levy by 2 percent each year, beginning in fiscal year 2016-17, the compounded increase would reach about $700,000 per year in five years.

Mr. Turner theorized that the previous Council’s intent was likely to increase the city’s property tax revenue and decrease sales taxes, shifting the city’s tax structure. Without stating a position, Mr. Turner suggested that could be a topic worth discussion.

“Is our long-range goal to adjust to where we’re receiving more money through property taxes as opposed to sales taxes?” he said. “… We should look at it from the long-range goal, I think.”

The Council did not get into that discussion during the Feb. 6 meeting.

Mr. Duensing said that the city’s property tax levy remains relatively steady as property values go up and the levy rate goes down.

“For the typical homeowner, it means the check they write this year will be the exact same as the check they wrote last year,” he said.

Property tax payments to the city won’t remain completely static, though. The example staff showed displayed a house that’s assessed value saw a year-toyear increase of $5,490. That homeowner’s amount paid to Glendale’s primary property tax levy, according to the example, would increase by $0.79 and his or her payment to the secondary property tax levy would increase by $2.73 for a total of $3.52 more in property tax dollars going to Glendale.

Though the amount ticked up, the levy rate in each category decreased by 2.2 percent.

Ms. Clark used her own home as an example, saying that her assessed value had increased by about $10,000 over the past year. She said her property tax payment to Glendale increased by $5.47.

“So, when people say, ‘Well, you’re keeping the levy the same,’ or ‘(The rate has) even gone down a little bit,’ they have to keep in mind that their assessed valuation may have gone up and that’s what would cause any increase in payment for Glendale property tax,” she said.

Mr. Duensing said that the city does see an increase in property tax revenues because new properties come in, increasing the collective assessed value of Glendale property. The revenue increase is about half a percent annually.

Mark Carlisle can be reached at 623-876-2518 or mcarlisle@newszap.com.