Arizona lawmakers completed the shortest legislative session in 50 years by passing several bills to improve truth-in-taxation policies in the state. However, the big news concerns legislation that failed.
HB 2253 sought to replace the current two-year property tax cycle with a one-year cycle, where property is valued and taxed in the same calendar year. Even though the bill was approved by the House, it failed to make it out of committee in the Senate.
HB 2253 faced overwhelming opposition from taxpayers and the Arizona business community. Opponents say it would have dramatically disrupted the coordination that exists in the current property valuation and budgeting calendar.
The current tax calendar runs approximately 18 months. Officials say this provides ample time for county assessors to mail Notices of Valuation to property owners, for owners to appeal any errors or inaccuracies, and for county assessors to deliver the finalized property tax roll to state and local governments to set tax rates during the budget process the following year.
The failed bill combined the valuation and tax calendar into one year. It accomplished this mainly by reducing the appellate process for taxpayers and pushing the date in which values are finalized to the same day that tax rates are adopted in mid-August. It would have required state and local governments to develop and adopt budgets using tentative property values that had not completed the appeals process.
Proposal May Resurface
A version of HB 2253 is likely to be introduced in the next legislative session. Sponsors are determined to revert back to a one-year tax cycle in light of the reduction in property tax appeals expected with the implementation of Proposition 117 this year.
Prop. 117 limits annual assessed value growth to 5% in Arizona and simplifies what was previously one of the most complicated property tax systems in the country.