Tempe City Council to hold public hearings on 2014-15 budget and property tax rate
Tempe, Arizona – This Thursday, the Tempe City Council will hold three public hearings related to the city’s operating and capital improvements budgets. They will take place June 12, immediately following the Regular City Council Meeting that begins at 7:30 p.m. in the City Council Chambers, 31 E. Fifth St.
The City Council will hold a public hearing to adopt a resolution approving the Capital Improvements Program (CIP) for the fiscal years 2014-15 through 2018-19. The five-year program totals $336.3 million. The city’s portion of secondary property tax is used by the city to repay bonds that fund repair and construction projects in the CIP. The CIP contains maintenance and construction projects related to streets, parks and city facilities, along with equipment purchases and more.
The City Council also will hold a public hearing to adopt a resolution to approve the city’s 2014-15 operating budget. The operating budget totals $430.7 million. It was tentatively approved by the Council at a May 22 hearing. This Thursday is final adoption.
The upcoming fiscal year starts July 1 and it marks the end of the additional sales tax approved by voters and promised by the City Council to expire in 2014. Those funds contributed to the General Fund – the city’s biggest operating fund – for four years during the worst of the latest economic recession and helped the city avoid more extensive layoffs and service cuts.
Tempe voters passed Proposition 401 during the May 18, 2010, General Election, allowing for a four-year, two-tenths of a cent sales tax increase that enabled the city to preserve essential services such as public safety and recreation programs. Effective July 1, 2010, the city portion of sales tax went from 1.8 percent to 2 percent. On July 1, that rate will go back to 1.8 percent.
Finally, the City Council on Thursday will hold the first of two public hearings for the adoption of the fiscal year 2014-15 property tax ordinance. The second hearing is set for June 26.
Councilmembers will consider a staff proposal to increase the total levy on existing properties by 1.8 percent, which is the same as the increase in inflation, according to the Consumer Price Index, West Region. The proposal adheres to the Council policy set in 2011 to keep the total property tax levy on existing properties relatively constant from year to year. The policy mandates that the city cannot increase the annual levy on existing properties by more than the Consumer Price Index rate of inflation. This allows the city to have a predictable pool of funds for debt repayment and new capital projects such as building repairs and construction.
If the levy changes as recommended, the City of Tempe total property tax rate will decrease from the current rate of $2.488 to $2.435 per $100 of assessed valuation.
Residents should note that their tax bills could increase or decrease based on the assessed values assigned to their specific properties by the Maricopa County Assessor’s Office.
For more details on the formulation of the 2014-15 budgets, visit www.tempe.gov/budgetplan.