Payson Council Boosts Property Tax Rate To Help Balance Spending

Despite rise in base rates, decline in bonds and assessed value will likely result in a small decrease for most homeowners

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The Payson Town Council last week approved an essentially break-even change in the town’s property tax rate.

The council also adopted a draft of a general fund operating budget of $13.6 million — up 14 percent from last year. The total budget stands at $46 million, compared to last year’s $75 million. But that huge figure includes millions in grants and capital projects the town must include even if it won’t actually get the money. This year, the town spent $28 million instead of the budgeted $75 million.

In the current fiscal year, total town spending will work out to about $1,800 per resident.

The town boosted its base rate enough to make up for the decline in the property tax rate needed to pay off the dwindling cost of bonds used to pay for the Green Valley Park improvements.

As a result of the rise in the base rate, the amount of money the town gets from property taxes will rise from about $606,000 to about $612,000.

Since Payson has about 8,000 homes, the increase should work out to about $1 per home annually.

For many homeowners, the actual tax paid should go down despite the rate increase, since the assessed value of most properties in Payson has declined by 25 to 30 percent from the peak, said Payson Mayor Kenny Evans. Overall, the town’s assessed value has declined by about one-third to roughly $2 billion.

“I think that as a result, the actual property tax paid will go down for almost everyone,” said Evans.

Payson doesn’t get much money from its property tax levy and instead relies mostly on its share of sales taxes.

Most of the money raised by the property tax in town goes to Gila County, the Payson School District and Gila Community College. On a $3,000 property tax bill, about $50 would go to the town of Payson.

Payson receives 2 cents on every sales tax dollar collected by the state.

The council raised the primary tax levy to the maximum allowed by law — about 31 cents for each $100 of assessed value.

That compares to a primary rate of about 26 cents per $100 of assessed value last year. That’s a 23-percent increase in the primary rate, but in most cases it won’t compensate for the decline in assessed value.

The secondary tax rate to finance the Green Valley bonds will drop from about 5 cents to about 3 cents per $100 of assessed value. That tax will raise the $61,000 needed to make payments on the Green Valley debt this year.

The council also adopted its operating budget, with big increases in employee benefit costs and significant increases in the operating budget for the fire department, mostly connected to the operation of the new, third fire station. A big chunk of that increase won’t materialize, however, if the town doesn’t get federal grants to cover firefighters’ salaries.

The new tax rates won’t face final adoption until July 7.

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