Voters rallied behind a proposal that is meant to check wild swings in property tax bills, the initial count by the Secretary of State’s Office shows.
Proposition 117 has so far received 57 percent of roughly 1.4 million votes that were tallied, Arizona’s election office reported.
Prop. 117 would cap increases in the taxable value of properties to no more than 5 percent beginning in 2014.
Also, a property would only be taxed using one value, whose growth is limited, instead of two.
The measure’s supporters said it is aimed at simplifying Arizona’s overly complex property tax system, where a property is taxed on two values, one of which can grow without limit.
They argued that the proposal would do two things: shield taxpayers from having to pay huge tax bills and prevent a yoyo-like infusion of revenues for governments.
But by not opting for more rigid tax caps, the measure balances taxpayers’ interests with the needs of governments to fund their operations, the supporters said.
Backers added it would take the sails out of a competing idea that espouses a stricter, California-style property tax limit, which they say would decimate government budgets and cripple operations.
The measure encountered a late pushback by tax consultants and some Republican activists.
The tax consultants argued that the measure will shift the burden to homeowners and small businesses from owners of larger properties, such as industrial and office buildings.
They said homes and smaller properties are valued, for taxing purposes, closer to recent purchase prices while large properties are not.
They said this means an owner of a $100 million property that is assessed at 55 percent of its actual sales price will pay a smaller share than a homeowner whose property is assessed closer to the purchase price.
Meanwhile, supporters of Proposition 13 Arizona, which seeks harder limits on property taxes, said Prop. 117 wouldn’t limit increases in property tax rates. They believe that is a major flaw that allows taxing jurisdictions to hike rates in order to maintain or increase their budget.
But backers said that argument ignores a political reality: It’s extremely unpopular among homeowners to increase property tax rates and there are political repercussions for ignoring these voters.