Ah, the beauty of running a rapidly-expanding city: You can charge less, yet still have much more money to spend.
At a study session last week, the Mesa City Council was delighted to hear residents will be paying more in taxes this year.
Because Mesa renters and home and business owners will be paying less than expected.
During a presentation last May, council was told the $100 million Mesa Moves transportation bond would show up as an added $28 on a median homeowner’s tax bill.
Now, five months after Mesa voters approved the bond, Council received an update.
The owner of a median home ($279,000 value) is now expected to pay only about $10 more in taxes compared to last year, thanks to all the new construction that has expanded the tax base, lower borrowing rates due to the city’s AAA rating and other factors.
Though the numbers are still preliminary, wide grins spread over the faces of council members, with some giggles of delight.
“Ten dollars is great compared to $28,” said Councilwoman Julie Spilsbury.
As City Manager Chris Brady put it: “The way I like to pitch it is it’s $10 for the whole year to add $100 million of street improvements.”
Mayor John Giles said credit goes to the city management and staff.
“The reason this is $10 and not $28 is the actions of our staff,” Giles said.
“The bad news is you pay property taxes; the good news is there’s a great story to tell as far as the city of Mesa’s management.”
Mesa does not have a primary tax. The Mesa Moves bond will show up on the secondary tax levy of home and commercial property owners tax bills; renters pay this indirectly, as their landlords take on the charges.
Last year, the owner of a home valued at $279,000 paid about $160 in Mesa taxes; this year, that will rise to $170.
According to Ryan Wimmer, the city’s treasurer, last year, the city collected $41.7 million, with a tax rate of $1.1171.
This year, the city will collect around $45.1 million with a tax rate of $1.1319.
Tax statements are sent out in September, with half-year payments due Oct. 1 and March 1, 2022, according to Wimmer.
Homeowners pay about 47 percent of the total levy, with commercial owners contributing 28 percent and non-primary residential owners (which includes multi-family rental owners) 22 percent.
Combined, they will pay about $3.4 million more than last year due to the $100 million Mesa Moves bond, which is spread over six years.
“In addition to the general obligation bonds approved in 2020, the levy includes funding for bonds approved in 2008, 2012, 2013, 2014, and 2018,” Wimmer said.
In 2014, Mesa owners paid a levy rate of $1.1853, totaling $33.4 million. While the proposed rate of $1.1319 is 5 percent lower than the rate paid seven years ago, the city is collecting $45.1 million from taxpayers, a whopping 35 percent more than it collected in 2014.
Two reasons, for this: An expanding tax base, combined with accelerating home values.
In 2014, a median home in Mesa was worth $134,000. That figure rose in each of the succeeding years and now a median home in Mesa is valued at $279,000.