We sit down with Pima County Administrator Chuck Huckelberry to learn more about Social Impact Bonds.Listen:
Pima County sued the state Monday, claiming a provision of the new state budget unconstitutionally requires the county to pay some of a school district's taxes.
In its special action filed with the Arizona Supreme Court, the county cites a complex provision of the budget that would require its taxpayers to cover some of Tucson Unified School District's taxes that exceed a state constitutional limit.
“It is unfortunate the county has had to resort to legal action to insure fair and constitutional treatment of our taxpayers,” Pima County Board of Supervisors Chair Sharon Bronson said in a press release.
County Administrator Chuck Huckelberry said last month that he was going to recommend to the supervisors that they file suit over the provision.
The issue involves a 1980 state constitutional amendment that caps the primary tax on a residential property at 1 percent of its full cash value.
More than one jurisdiction - a county government and a school district, for example - overlap and both charge primary tax rates, combined they can exceed 1 percent.
In such instances, the state has covered the overage, but under the 2015-16 state budget passed in March, it will cover up to $1 million per county. The state Property Tax Oversight Commission determines which jurisdiction would be responsible for the rest.
“That’s really a shift in tax burden between the state and the county and we think that’s unlawful,” Huckelberry said in a May interview.
Pima County officials said in Monday's press release that the total amount could be between $8 million and $18 million.
Huckelberry and other county officials have complained that the state budget passes along $23 million in state costs to the county.
The Board of Supervisors has passed its budget for the next fiscal year, accommodating that pass-along. It has yet to set its tax rate, which would rise, at least in part, because of the state's pass-along, county officials have said.
“If the county is successful in overturning the legislation that transferred those costs to our taxpayers, we’re simply going to give that tax back," Huckelberry said.
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