Purpose

Requests voter approval during the next general election of constitutional amendments to establish further limits on property tax valuations and levies.

Background

Article IX, sections 18 and 19 of the Arizona Constitution currently provide for limits on property tax valuations and levies. Section 18 provides for various methods of valuing real property, improvements and mobile homes and designates the lowest valuation as the amount to be used for most property tax purposes. Section 19 limits increases in the amount of property taxes levied by various taxing jurisdictions each year to two percent.

S.C.R. 1001 proposes modifying sections 18 and 19 by requiring that inflation also be taken into account when determining both property values and the maximum amount of property taxes that jurisdictions such as counties, cities and school districts may levy.

The fiscal impact of S.C.R. 1001 is currently undetermined.

Provisions

Section 18

1. Provides for an additional method of calculating the tax value of certain types of real property, improvements and mobile homes using a percentage change in the federal GDP price deflator, and requires assessors to use the lowest property value established through any allowable method for most tax purposes.

2. Requires the Legislature to establish laws outlining a method for valuing new or changed property that may be subject to valuation using the GDP method, and a uniform procedure determining and notifying county assessors each year of the percentage change in the GDP price deflator. The Legislature may take into account any changes made in the formula for calculating the GDP price deflator.

Section 19

3. Includes school districts among the entities with limitations on property tax levies.

4. Limits the increase in annual property taxes levied by counties, cities, towns, school and community college districts to the lesser of two percent or the percent change in the federal GDP price deflator. Currently, the amount of property taxes levied by various taxing jurisdictions each year is at two percent

5. Requires the Legislature to establish laws outlining a uniform procedure for determining and notifying taxing jurisdictions of the percentage change in the GDP price deflator each year. The Legislature may take into account any changes made in the formula for calculating the GDP price deflator.

Miscellaneous

6. Requires the Secretary of State to submit the proposition to voters at the next general election and becomes effective if approved by the voters and on proclamation of the Governor.

7. Makes technical and conforming changes.

Prepared by Senate Staff