Homeowners in the Payson Unified School District (PUSD) will pay 3 percent less on their property taxes this year to K-12 schools if the Gila County Board of Supervisors approves the estimates on Aug. 20.
The changes would mean that the owner of a $100,000 home in Payson will pay to the PUSD $348.77 — an $11 decrease from this year. The bill will go down more if the assessed value of the home drops.
However, second-home owners may see an increase because the state Legislature repealed a long-established tax break.
The state-established primary rate for operations will drop 16 percent to 3.309 per $100 of assessed value. The voter-approved secondary rate for bond issues and construction will rise 20 percent to 1.5021.
Last year, many of those paying property taxes to support the schools in the Payson district saw their payments jump by a stunning 50 percent. Administrators then blamed the rate increase on a 20 percent drop statewide in the assessed property values that drove up the primary rate, plus the school district’s mistaken financial projections, which forced a big jump in property taxes.
Residents last year rose up in an uproar over the big increase.
“Last year our tax rate on the primary rate was high because of a negative cash balance,” said Kathie Manning, business manager for Payson schools. “(This year) our tax rate is back where it should be.”
However, taxpayers won’t see a noticeable rollback on the higher rate and many may not immediately benefit from a roughly 10 percent decline in assessed values in the district.
Taxes collected under the primary tax rate cover basic maintenance and operations of the county, city or taxing district. The voter-approved secondary rate repays bonds for things like school construction.
“On the secondary side, the rate is increasing, but that supports the voter-approved M & O override and bonds,” said Manning.
Local authorities use secondary tax rates to pay for voter-approved bond debts, tax overrides and additional taxes for the local area.
Payson voters voted twice to support the school district.
In 2010, Payson voters approved increasing property taxes to cover the cost of programs such as music, physical education and technology classes.
State law allows the additional property taxes to boost the school budget by 10 percent.
In 2006, Payson voters approved a $34 million bond to improve school facilities. With that money, the district rebuilt Julia Randall Elementary, built new and remodeled other buildings at Rim Country Middle School, plus improved the security, play areas, interior comfort and square footage of the other Payson schools, reported the district Web site.
On their property taxes this year, owners of a home in the Payson school district valued at $100,000 will pay $348.77, according to calculations by Larry Huffer of the Gila County Assessor’s Office.
That total includes the primary and secondary tax rates, plus the discount for “less state aid” — a discount on property taxes the state gives homeowners.
“What’s unusual this year is that if it is not their primary residence, property owners do not receive the less state aid discount on their taxes,” said Huffer.
Last year, the state Legislature, in a search for more tax dollars, removed the less state aid tax break for owners of second or vacation homes.
So the owner of a $100,000 Payson home used as their primary residence will still receive a $132.37 discount on property taxes this year for less state aid, said Huffer. But second-home owners and owners of rental property will lose the discount.
Manning said the Joint Legislative Budget Committee sets the Arizona school tax rate.
An online analysis by the Mohave County assessor explains how tax rates are created:
To determine the tax rate, the taxing entity must understand the amount needed for operations and maintenance. Then the organization analyzes the total assessed value of property.
With those two bits of information, the taxing authority takes the budget and determines what is needed for income.
Dividing the income needed by the assessed value determines the tax rate.
The Gila County Board of Supervisors votes to set the tax rates for all property taxes in the county.
The board will vote to set tax rates at its Aug. 20 meeting.