This is part six and the final installment of a series of stories in The Times related to Town of Fountain Hills finances as residents prepare to go to the polls May 20 to consider a primary property tax.

Part 1: Series begins on property tax vote
Part 2: Here is an overview of the Town's financial picture
Part 3: Here’s an overview of town’s financial picture
Part 4: Overview of town’s finances
Part 5: SPAC lists overall revenue enhancements

The question is really fairly simple as it appears on the ballot,“Shall the mayor and council of the Town of Fountain Hills, Arizona be authorized to levy a primary property tax not to exceed $4,500,000? If such an amount is approved by voters, it will be the base for determining levy limitations for the town for future fiscal years.”

As Fountain Hills residents contemplate this $4.5 million question on the town election ballot May 20, the question foremost on their minds is likely, “How much is this going to cost me?”

Although determining the answer to the question is not difficult, the answer is different for virtually every property in town.

In the first example, explored will be a home with a $500,000 limited property value, which, if not average, is close to a median home value in Fountain Hills.

According to the tax calculator provided on the town’s Web site, a property with the $500,000 LPV would have an additional tax of $440 per year, which equates to $36.67 per month.

A property at the lower end of the value spectrum, with a $200,000 limited property value, would have a primary tax bill from the town of $176 per year ($14.67 per month).

Going higher on a home with a $1 million limited property value, the tax would cost the owner $880 a year, or about $73 per month.

An individual can take their most recent tax bill or statement to the town’s Web site at fh.az.gov to check out the amount for their property. The Maricopa County Assessor’s Office also has a property tax calculator on its Web site.

Many people fear that approving the primary property tax is tantamount to giving the government a “blank check” for as much as they want in future years. Or that the town can simply go back to voters for more money when they think they need it.

Once the levy is set by voters, in this case $4.5 million, there is no provision in state law that allows the town to go back to voters and ask for that levy to be increased.

Town officials can not go back, in a few years, and ask voters to increase the levy by another $1 million or $2 million. That would be the base amount the town would work from in the future.

There are provisions for increasing the levy, however. The Arizona Constitution limits how much the tax levy may be increased each year to 2 percent (Article IX, Section 19).

This permitted increase means that in the second year the town would be able to collect $4.59 million, plus anything added by new construction.

The town is not required to increase the levy each year, but the way the law is written the incentive is to take the increase, and it is unlikely the town would skip a year.

The council has taken steps to somewhat offset the impact of the property tax by approving an ordinance that would reduce the local sales tax by .5 percent (2.6 to 2.1 percent) if the primary property tax is approved by voters.

That reduction would be effective at the time the town begins to collect new property taxes.

The Town Council has indicated a desire to use the new property tax revenue specifically for public safety services.

Proponents of the tax said this is a key area where part-time residents are not paying a fair share for the full-time protection they are getting.

Critics note that such a dedication of tax revenue cannot be legally done and the earmark for public safety is little more than a ploy to make the tax more palatable to voters.

The law is that one council cannot make any financial commitments that would be binding on any future council.

What the council has done in this case is pass a resolution to the effect that the money would be spent for public safety. According to Town Finance Director Julie Ghetti, this will be done with a separate “Public Safety Fund.”

“The Town Council has the authority to designate where primary property tax revenue will be utilized,” Ghetti said. “If the voters approve the primary property tax the revenue would be segregated in a separate (public safety) fund that will be used to pay for police and fire.

“This fund will still require a General Fund subsidy of approximately $1.6 million.”

The property tax levy is a maximum of $4.5 million, and the current Sheriff’s and fire contracts total $6.1 million.

If the primary property tax levy is approved by voters the levy would take effect for the next fiscal year.