Board of Supervisors Cuts Property Tax Rate, Works to Blunt Inflation in Final FY 2023 Budget
Maricopa County supervisors are addressing the rising cost of goods and services head-on with a budget that cuts taxes and helps people pay their bills. The Board approved a final fiscal year 2023 budget which aims to blunt the impact of inflation in the nation’s fastest-growing county using every avenue possible, including hundreds of millions of dollars in American Rescue Plan funds to provide financial support and resources for individuals, families, and businesses.
“The Phoenix metro area has gone from one of the most affordable in the country to one of the hardest hit by inflation. Our goal with this budget is to provide some relief to individuals and families dealing with rising costs,” said Board of Supervisors Chairman Bill Gates, District 3. “To do that, we are cutting property tax rates across the board. We are also taking advantage of low interest rates to pay down pension debts so that a larger percentage of future budgets can go directly to services for residents. Finally, we are doubling down on investments that fund affordable housing projects, rental assistance, workforce development, and support for small and micro sized local businesses.”
While rising property values are outside the Board’s control, state statute does give supervisors the ability to set the property tax rate. The final FY 2023 budget lowers Maricopa County’s primary tax rate to 1.25 (or $125 on a $100,000 home). Even prior to this cut, Maricopa County had the 5th lowest rate among Arizona’s 15 counties (FY 2022) despite being the largest county.
“I’ve always said that one of my primary jobs as a supervisor is to look out for taxpayers and to make sure they get a good return on their investment. Because we’ve been fiscally responsible in the past, we can lower the tax rate this year at a time when many families can use every extra penny they can get,” said Vice Chairman Clint Hickman, District 4.
In recent years, the cost of employee pension plans has risen dramatically in the government sector, limiting discretionary spending. This year, the Board is taking advantage of low interest rates to pay down unfunded pension liabilities. Over the course of two years, the Board will direct $500 million into the Public Safety Personnel Retirement System (PSPRS) and Corrections Officer Retirement Plan (CORP) that provides retiring government employees in the law enforcement sector with the pension money they’ve earned. Paying down debt now means a smaller percentage of future budgets will be needed to pay for these pensions.
“I’m pleased that we are taking a long-term view of the county’s financial health while also making targeted investments that help people who need it most right now,” said Supervisor Jack Sellers, District 1. “Pension debt has been an issue for years, not just in Maricopa County but everywhere, and this aggressive move to pay off debt sooner will benefit both residents and retiring staff.”
Maricopa County received $435 million in American Rescue Plan funds last year and will get another $435 million this year to help the community recover from the COVID-19 pandemic and its economic and social impacts. The County has been recognized nationally for its wise use of these dollars, including a rental assistance program that has distributed more than $100 million to residents. The new tranche of money will fund effective, existing programs while expanding efforts to address critical community needs such as labor force challenges and a shortage of affordable housing. To date, the Board has allocated $65 million in rescue funds to increase the amount and variety of affordable housing in the region.
“Buying a home or renting an apartment has become increasingly difficult in Maricopa County. Additionally, the number of people experiencing homelessness has grown and includes people of all ages. This budget addresses housing insecurity issues through new and existing projects, including cutting the tax rate for all property owners,” said Supervisor Tom Galvin, District 2. “Getting our arms around the housing crisis is necessary to ensure our economy works for everyone.”
Maricopa County will also continue to invest in infrastructure to better deliver services to our 4.5 million residents. Major capital projects funded in the FY 2023 budget include a new elections center (MCTEC), a new emergency management building, a new East Valley animal shelter, Sheriff’s Office substations in Mesa and Surprise, continued work on the Central Court building, and millions of dollars of improvements and enhancements at county parks.
“What we’re doing is making legacy investments—in housing and other infrastructure—that will outlast all of us in office for the benefit of our growing community,” said Supervisor Steve Gallardo, District 5. “I’m especially proud that this Board has committed funds to assist historically marginalized groups as well as those who are perhaps struggling for the first time in their lives to pay all their bills. As a government, we are a critical part of our community and where we can help, we should.”
Mostly due to the injection of another $435 million in federal funding through the American Rescue Plan Act and the decision to borrow money to pay down the PSPRS pension debt, the overall county budget will increase by $948 million in FY 2023. The pension debt money will be withdrawn and paid back over a period of two years so that the county pays as little interest as possible. In the long run, it is cheaper to pay interest on the new loan than it is to carry on with the status quo where pension debt as a percentage of the annual budget continues to rise.
As in years past, a significant portion (46%) of the county budget is allocated to public safety with the next largest percentage covering health, welfare, and sanitation (32%).
To learn more visit: Maricopa.gov/budget.