By Amy Silverman
By Olivia LaVecchia
By Monica Alonzo and Stephen Lemons
By Chris Parker
By Michael Lacey
By Weston Phippen
As everyone knows, property values have soared in the past two years. Maricopa County Treasurer David Schweikert says the average residential parcel will see a 52 percent increase in assessed valuation. Property tax valuations are being mailed this week to property owners.
What this means is that a home worth $100,000 last year will now be valued at about $152,000. Therefore, the property taxes collected to repay the City of Phoenix's latest bond package will jump from $29 to $44 for the same property.
No matter how you cut it, the bond issue will result in citizens paying higher property taxes.
Mayor Gordon says rising property values are a positive sign, and, indeed, they are, if you can afford the higher property taxes that come along with it.
"Property values in a desirable city are going to go up whether there is a bond election or not," Gordon says. "We didn't raise the tax rate."
But the city didn't lower the tax rate to compensate for the higher property values, either. Instead, it wants to add more debt.
Pullen says the city could reduce the value of the bond sale by half and still provide residents a bit of property tax rate relief. But the city, Pullen says, doesn't want to ever reduce the overall property tax rate for political reasons:
"Once the tax rate goes down, you can't get it to go back up because it's a tax increase, and no one is going to vote for that."
It does appear that the city is overzealous in its desire to sell bonds and is even having difficulty spending the bond money approved five years ago. Voters approved a $754 million bond package in 2001 -- and the city has yet to spend $164 million of that.
Now the city wants to add another $878 million in debt for a wide array of projects, a number of which stray far from the traditional role of using bonds to pay for major capital projects such as roads, sewers, water treatment plants, open space and recreational facilities.
Among the more unusual projects the bond issue would fund is the construction of several small high schools, along with environmental cleanups that should be the responsibility of private businesses. The ASU investment is particularly controversial since city bonds traditionally aren't used for state-funded universities.
There certainly is an appearance that the city is piling on unnecessary projects to increase the amount of the bond issue so the combined property tax rate won't decline.
I find that extremely troubling.
Why should we trust the city now when it already didn't level with us in the past on two major downtown projects?
One of these is the massive $40 million parking garage on the northwest corner of Seventh Street and Washington downtown that loses hundreds of thousands of dollars a month. The city had the audacity to tell the public it was building the 3,000-space garage to serve (get this!) the newly opened science center.
This lie was bandied about to avoid a public vote that would've been necessary if the city had revealed that the garage's real use was parking for Bank One Ballpark, now Chase Field ("Parking Mirage," April 25, 1996). It's unlikely voters would've approved spending money on the structure that critics derisively dub the Garage Mahal.
Even more outrageous is the city-owned, 1,000-room, $350 million convention center hotel. The city also sneaked this one past the voter-approval requirement by creating a "municipal corporation" that last November sold $350 million in bonds supposedly to be repaid from proceeds from the hotel.
Once again, the city promised citizens that the project wouldn't cost them a dime, but careful examination of bond documents shows that taxpayers are on the hook for shortfalls between revenue generated by the hotel and the cost of repaying the bonds.
The hotel is the boondoggle from hell that no private developer would dare to undertake because it's a guaranteed financial loser. I predict the project, which will break ground next week, will bleed the city for years to come ("Stick It To 'Em," July 8, 2004).
Given the city's history of deceit on these two projects, and its misleading "No New Taxes" campaign for the current bond election, I urge voters to reject the bond package and force the city to come up with a proposal that provides funds for needed projects and lowers the combined property tax rate.