For Immediate Release
Council gives direction on Property Tax as FY13 budget moves ahead
Surprise, AZ (April 4, 2012) The Surprise City Council gave staff broad direction on next fiscal year’s property tax expectations in the budget portion of its work session Tuesday night.
The Council directed staff to collect the same revenue from existing properties, plus the $100,000 added by new construction, for a total of $6.3 million in FY13, which begins July 1, 2012. Chief Financial Officer Scott McCarty estimated that due to declining values, collecting the same amount of revenue would require the County Assessor to increase the City’s share of the property tax rate to $0.74 per $100 of assessed valuation, from the current rate of $0.67.
McCarty emphasized adjusting the rate in order to collect the same amount of revenue does not result in an absolute property tax increase, since each property is valued individually in a market where values are still declining.
Council members pointed out that part of the City’s budget strategy is to protect revenue streams, and if properties values go up, collecting the same amount of revenue would mean a lower rate.
McCarty said last year, the Council determined it did not want the tax rate to change, and when that direction was combined with lower valuations, the amount of revenue the city collected dropped by more than $1 million.
If the rate were to remain unchanged in the coming fiscal year, McCarty said the revenue estimate would decline by an additional $500,000 due to continually declining assessments.
The Council also heard that City revenues in the current fiscal year (FY12) are 10% greater than last year’s revenues, and approximately 4% over the amount anticipated in the FY12 budget. McCarty attributed the increase to a recovering economy.
Looking ahead to FY13, the Finance Department forecasts a 6% jump in revenues to approximately $88.2 million, an increase of $4.7 million over FY12. Among factors the Department anticipates in FY 13 are a generally improving economy, no city fee increases, a larger share of state shared revenues for Surprise and the passage of the APS franchise agreement in an August election.