Many of you have received your property tax bill for 2017, and if you haven't received it yet, you will be receiving it soon. I received multiple inquiries from local taxpayers yesterday that focused on the same things: "Why did 'Additional Education Aid' go up so much and what are you going to do with all the money?" On a tax statement, this is the roughly 50% increase in the line that appears as, "ADDL EDUC AID-FOUNTAIN HILLS" (the screenshot above is from my tax statement so you can see what it looks like).
The second part of that question is extremely easy to answer: Fountain Hills Unified School District receives $0 additional dollars from local taxpayers' increased contributions to "Additional Education Aid-Fountain Hills". Revenues collected through that tax levy go into the state of Arizona's General Fund, NOT to FHUSD. The reasons why that is the case and why the percentage went up are more complicated, but I will try my best to explain in the paragraphs below.
Before you read the paragraph that follows this one, I will take my best crack at explaining it in advance in plain English: All taxpayers in Arizona have to pay the "qualifying tax rate" for their school district property tax. This qualifying rate is set by the state of Arizona. Because the Net Assessed Values in Fountain Hills are high compared to the requirements of funding our school district, we pay less that the qualifying tax rate to fund FHUSD. Fountain Hills taxpayers then pay the difference between the FHUSD funding and the qualifying tax rate in what is called "Additional Education Aid." The revenues generated and collected through this levy do not go to FHUSD but go into the state's General Fund.
Here is the exact language taken straight from Arizona State Senate Issue Brief, October 20, 2016 (pages 3 and 4). I warn you in advance: Read it at your own risk.
"Each county is required to levy an additional primary property tax in school districts that are ineligible for state equalization assistance ("non-state aid districts"). This additional tax rate, sometimes referred to as the minimum qualifying tax rate (MQTR), is determined based on the difference between the levy that would be produced by 50 percent of a non-state aid district's applicable QTR and its equalization base. If the levy produced by 50 percent of the district's applicable QTR is equal to or less than its equalization base, the MQTR will not be levied in the non-state aid district. Otherwise, the MQTR will be levied at a rate such that the additional tax generates an amount equal to the difference between 50 percent of the non-state aid district's QTR and its equalization base. The revenue generated from the MQTR is deposited into the state General Fund."
On my 2017 tax statement, the primary tax to FHUSD decreased by $116.20. The amount for the FHUSD Override went up by $2.56 while the FHUSD Bond amount went down $1.17. The net change in the tax I will pay to support FHUSD is down $114.81. Because of the formula above and the tax rates, that leaves more room for the "Additional Education Aid" levy to increase, and in my case it went up $30.66, a 50% increase. I emphasize again that the revenue generated by the "Additional Education Aid" DOES NOT go to FHUSD but rather to the state's General Fund.
If you've not done so already, I encourage you to go to the Maricopa County Treasurer's website at: https://treasurer.maricopa.gov/ and enter your parcel number. You can then go to the "Tax Information" tab at the top and select "Detailed Tax Statement". This will provide a complete breakdown of your 2017 property taxes compared to your 2016 property taxes. The vast majority of local property tax payers will see that their tax liability to support FHUSD has decreased.
Respectfully,
Patrick Sweeney, Ed.D.
Superintendent