The City of Maricopa’s proposed operating budget of $85.2 million budget for the upcoming fiscal year is on track to include an approximately 6% property tax rate reduction, despite the projected loss of anywhere from $2.5 to $4 million in revenue to the economic effects of the COVID-19 pandemic.
City Manager Rick Horst said the City has kept its property tax rates level over the last five years, but “we had hoped to reduce our property taxes ever since we adopted our budget last year.
“Obviously with the COVID-19, that made it a little more challenging this year, but at the same time we still felt comfortable moving this tax reduction forward because the city has been very prudent and very conservative in our budgeting, and we felt that a big part of our recovery is to put the money back into the hands of our citizens and business owners so they can make those investments into their businesses,” he said.
The preliminary budget for fiscal year 2020-21, unanimously approved by the City Council May 5, is based on a primary property tax rate of $463.09 per $100,000 assessed valuation and a secondary property rate of $93.48, for a combined rate of $556.57, Horst said. He added last year’s combined rate was $597.16.
Public hearings will then be held during May and June, with final budget adoption by the council required by Aug. 7 under state law.
Primary property tax mostly funds daily government operations and secondary taxes pay off bond debt, which Horst said has been renegotiated to a more favorable rate this year.
Another recent development that Horst said is helping the City now is the creation of a $1 million “disaster contingency reserve” for the current year’s budget.
“So we actually put monies away anticipating we might have a disaster sometime in the future, and lo and behold, guess what, we do, but because we put money aside for that we’re better prepared,” he said.
Horst said Maricopa has other contingency funds equaling about 60% of the general fund budget, so officials aren’t expecting to furlough or lay off employees or reduce any services to the public.
Population growth is expected to continue pulling new property tax revenue into the city, he added: “Obviously we’ll have some new dollars because we have more new homes and more assessed value because we’ve built almost 1,000 new homes in the last year alone, plus the commercial and retail properties.”
He said additional demand on social service-related programs in the area hasn’t become too much of a concern, with nonprofits and faith-based organizations able to help many who are struggling in the current economy.
“There might be some isolated cases out there we’re not aware of, but for the most part our citizens are doing well, and those needs are being met because of the generosity of neighbors. And that’s part of what makes Maricopa unique, is that we are a pretty diverse community, but very unified in a lot of ways,” he said.
Horst said the City’s rapid population growth doesn’t show any sign of stopping, with more than 100 new housing permits issued during April. “Our future is bright,” he said.