Arizona Supreme Court: Pima County, et al. v. State of Arizona, et al.
Case No. CV-21-0213-PR Filed July 22, 2024
ISSUES:
- Whether the 2018 amendments to A.R.S. § 15-910 eliminated the State’s obligation to reimburse the County for desegregation expenses under § 15-972(E).
- Whether these amendments violate article 9, section 18 of the Arizona Constitution.
DECISION:
- The Court held that the 2018 amendments to § 15-910 removed the authority to budget desegregation expenses using primary property taxes, creating a new classification of secondary property tax for budgetary purposes. This new classification is not part of the § 15-972 calculations, which only apply to primary property taxes.
- The Court determined that the new category of secondary property taxes established in § 15-910(L) does not violate the Arizona Constitution. The 1% Limit remains intact, and all ad valorem property taxes outside of the exceptions in article 9, section 18 of the Arizona Constitution must still comply with the 1% Limit.
Synopsis:
This case revolves around the interpretation of Arizona’s property tax laws and their application to school district desegregation expenses. The Arizona Supreme Court examined whether the State must reimburse Pima County for desegregation expenses that exceed the Arizona Constitution’s 1% Limit on residential property taxes as “additional state aid for education” following legislative amendments to A.R.S. § 15-910. The Court’s analysis focused on the legislature’s 2018 amendments to § 15-910, which created a new classification of secondary property tax for desegregation expenses. The Court determined that this new classification is not subject to the reimbursement calculations under § 15-972(E), which only apply to primary property taxes. The Court emphasized that the primary and secondary property tax classifications are purely statutory and can be amended by the legislature, as long as the amendments do not violate the constitution by causing taxpayers to pay more than 1% of their limited property value. The Court found that the new category of secondary property taxes established in § 15-910(L) does not violate the Arizona Constitution, as the 1% Limit remains intact.
Outcome of the case:
The Arizona Supreme Court affirmed the opinion of the Court of Appeals, holding that the State is not obligated to reimburse the desegregation expenses paid by Pima County. The case was remanded to the tax court for the entry of judgment in favor of the State. The Court declined to award attorney fees to either party.