Arizona voters may get a chance to protect themselves from property tax sticker shock.
The Senate Finance Committee on Tuesday easily approved a proposed constitutional amendment to reset the tax base that cities, counties and community colleges use to determine how much tax they can raise. This would limit 2007 property taxes to no more than 2 percent above 2006 levels.
The measure goes to the full Senate. Voters would be asked to ratify it in November.
In 1980, voters approved a constitutional limit on how much local governments can increase spending from year to year. That is 2 percent over the prior year, plus revenue that comes from homes and buildings that have since been constructed.
Sen. Dean Martin, RPhoenix, said the problem is the levy limit has grown even faster than spending. Legislative staffers figure that if every local government spent as much as it’s entitled to, spending would increase by $170 million.
Complicating matters, Martin said, has been the spike in home values.
He said that lets local elected officials actually lower tax rates while increasing what homeowners actually pay.
“Valuations are jumping,’’ he said, “and if we don’t do anything, government is going to see a huge windfall profit.’’
Martin said resetting the tax limit base to 2005 levels would ensure that the big hike in last year’s property values didn’t give governments the power to boost taxes accordingly.
Pima County lobbyist Mike Racy argued that the proposal is unnecessary. He said cities, counties and community colleges haven’t raised as much as legally allowed, proving that the system works.