DALLAS — Property tax collections in Arizona’s largest county will fall for the third straight year as real estate values continue to plunge, officials said.
Total assessed tax for all Maricopa County homeowners from all taxing districts is estimated at $3.9 billion this year, down 7% from $4.2 billion last year and $4.3 billion in 2009.
The falling revenues come as Arizona’s housing market continues to decline. In the Maricopa County seat of Phoenix, home prices in June were down 9.3% compared to the same month in 2010, according to the Standard & Poor’s Case-Sheller Home Price Index.
Though the median Phoenix home price of $100,690 was 0.3% higher than in May, the city continues to rank as one of the hardest hit in terms of the housing market. The only two cities in the 20-city survey with lower prices were Detroit at $65,420 and Las Vegas at $95,670.
To compensate for the falling values, localities in the county have been raising their tax rates to keep revenues steady.
Earlier this month, the Maricopa Board of Supervisors boosted its property tax rate by 18% for fiscal 2012 to $1.24 per $100 of net assessed value from $1.05. County-wide, the median assessed home value has fallen from $147,000 to $124,500, a decline of 15.3%, officials said.
This year’s tax increase followed a hike from $0.99 per $100 the previous year.
Property taxes account for 45% of Maricopa County’s general fund revenues, followed by state-shared sales taxes at 35%, and vehicle license taxes at 10%.
The county has experienced declines in sales taxes and vehicle license fees in the past three years.
With the state government also suffering deep budget cuts, the county has increased mandatory contributions to the state for public services in fiscal years 2009 through 2011 averaging $24 million per year, or 2.5% of budget.
County officials estimate that Arizona could increase costs to the county by $25 million in fiscal 2012 based on the state executive’s proposed budget. To mitigate declining revenue and additional costs imposed by the state, officials estimate the county has reduced its budget through fiscal 2010 by a cumulative $342 million, or 20% since fiscal 2007, primarily through eliminating vacant positions and delaying capital expenditures, according to analysts at Standard & Poor’s.
Despite the budget pressures, Maricopa County has retained its triple-A issuer credit rating from Standard & Poor’s, a notch higher than the United States government. The outlook is stable.
“We believe Maricopa County’s strong financial management, reflected in its proactive budgetary adjustments and continued strong reserves, continues to provide support for the AAA rating,” Standard & Poor’s analysts wrote in March, five months before the agency downgraded the United States to AA-plus.
Moody’s Investors Service rates the county Aa1 with a stable outlook.