Various factors have caused the tax rate in the Gilbert Public Schools district to jump 40 percent this year, the highest increase in at least 30 years.
Despite the jump, district officials assert that the actual total tax rate of $7.20 per $100 of assessed valuation is $3 less than the highest rates in 1995 and 1997, when the rates were between $10.45 and $10.40 per $100 of assessed valuation, respectively. The rate increase affects property owners in those portions of Gilbert and Mesa that are within the district's boundaries.
The tax rate also winds up in the middle of those levied by surrounding school districts this year, with Higley and Queen Creek school districts higher, and Mesa and Chandler districts lower, said Clyde Dangerfield, GPS' assistant superintendent for business services.
"It's far from the highest; it's just the jump that's causing everyone the heartburn," said Dangerfield, adding he lives in Gilbert and that his taxes went up $208. "People are used to paying lower. I can completely understand it."
In comparison, Higley Unified School District's new tax rate, which is $7.28, is 10 percent higher than the year before. However, last year's rate jumped 38 percent higher than the 2010 rate, according to information provided by the Arizona Tax Research Association.
Higley had several high-rate increases in the past 30 years, including an 88 percent increase in 1987, when the tax rate rose from $5.18 per $100 of assessed valuation in 1986 to $9.73.
Arizona has a "very complicated property-tax system, and the evaluation system is very complicated," said Kevin McCarthy, president of the Arizona Tax Research Association.
"It's hard for taxpayers to know what the cause is," McCarthy said. "That results in a lot of calls just with people trying to get to the bottom of why their tax bill did what it did."
Property-tax bills were mailed to Gilbert residents this month and the first half of property taxes are generally due Oct. 1. A handful of Gilbert residents have called the Arizona Tax Research Association to question the reason for the spike, a common occurrence this time of year, McCarthy said.
To figure out the amount of tax a homeowner actually pays, they can multiply the tax rate by the net assessed valuation of their home, and divide by 100, according to the Arizona Tax Research Association.
Gilbert officials estimated the $2 tax increase per $100 of a home's assessed value in July, when the governing board adopted the $305.87 million budget for this school year. The new budget includes a 2 percent pay increase for all employees, except the superintendent, for this school year only.
The main factors used to determine the amount of tax homeowners pay each year are the assessed valuations, qualifying tax rate, student enrollment and the district's year-end cash balances, according to GPS information.
Last year's tax rate was lower than normal because it was driven down by a significant cash balance in the district's budget that totaled about $24.6 million. The cash balance drives down the property-tax levy, McCarthy said, adding, "When you do that, the next year's calculation is predictably higher."
Teddy Dumlao, GPS finance director, said the tax-rate increase "is a delay of the increase that should have occurred last year."
"The high cash balance that lowered the tax rate last year should have been adjusted to keep the rate less volatile," Dumlao said in a prepared statement. "The adjustments were difficult to track considering the many cash-flow issues from the delay of the state-aid payment as well as the reduction in state aid the following year. The formula, however, will automatically correct for the loss of tax revenue due to those variances in the following year."
In response, McCarthy said there's a lot of money "flying out between states and the school district, and errors in that calculation are not uncommon.
"It's likely that what they're saying is occurring," McCarthy said. "What doesn't happen is it doesn't (typically) affect tax rates. Usually it's netted out."
Other factors for the increase include:
--an 11 percent drop in total assessed valuations in the district, reflecting declining property values;
-- GPS' debt service -- the payment on school improvement bonds -- rose about $4 million in this fiscal year;
--- the state Legislature's decision to lower assessment ratios on commercial property, which pushes up residential taxes, Dangerfield said.
Also, the Legislature eliminated the 40-percent rebate for secondary residences "If you have two homes, and this one in Arizona is not your primary residence, that rebate was removed," Dangerfield said. "Some people are seeing a larger jump because of that homeowner rebate."
A vocal group of residents is scrutinizing Gilbert's taxes even more because GPS is asking voters to decide Nov. 6 whether to re-authorize the $17.6 million maintenance and operations override. Although the continuation of the override would not raise taxes, a defeat would lower taxes beginning in the 2013-14 school year as the override is phased out.