Maricopa County fire districts sounded the alarm nearly a month ago about a court decision they say could force them to cut essential services, rely on older equipment, or shutdown fire stations after a judge ruled the county overtaxed some property owners.
“It was a bomb. We went $6 million,” Arizona Fire & Medical Authority Chief Mark Burdick said. “It's almost like they're trying to put fire districts out of business.”
The County fire districts recently learned they owe a combined $10.6 million in tax refunds because of a property tax dispute the fire districts didn’t cause.
Fire authority considers boosting property taxes
If the county doesn’t come through with another solution, Arizona Fire and Medical Authority officials said it is now considering a tax increase for all property owners to repay the $5.9 million it owes in tax refunds.
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“Raise their tax by whatever amount to recoup this money,” Burdick said in a previous interview.
Chief Burdick said they have until the end of the month to adopt their budget and so far, no other viable solutions from state lawmakers or the County board of supervisors have been reached.
The Arizona Fire & Medical Authority operates 12 fire stations, largely in unincorporated parts of the county and mainly serving senior communities in Sun City West and Sun Lakes.
If approved, the property tax increase would last for two years.
Arizona Fire & Medical Authority said it would cost the average homeowner in Sun City West $53.52 each year. Property owners in Sun Lakes would pay $73.00 in additional property tax for two years.
“Either work with us or come up with a viable solution so that we don’t end up taking this out on the citizens we serve,” Burdick said last month.
A spokesman for the Maricopa County Board of Supervisors said they are still having conversations with the fire districts but had no formal solution to share as of Wednesday.
Arizona Governor Katie Hobbs recently signed HB2909, which gives many taxing districts financing options but mainly helps school districts.
Court decision at the center of property tax dispute
This all stems from a 2016 lawsuit, Qasimyar v. Maricopa County. A tax court ruled in favor of property owners who sued the county, alleging they were improperly and erroneously assessed when their properties went from a primary resident to a rental or secondary home or vice versa. And therefore, should have seen lower property tax bills because of what’s known as a “change of use.”
The Arizona Court of Appeals upheld the ruling and agreed some property owners were overtaxed, which forced hundreds of thousands of homes to be reassessed and resulted in property tax refunds from 2015 to 2021.
The Maricopa County Assessor and Treasurer both have websites now dedicated to the far-reaching impacts of the court decision.
Other fire districts, taxing authorities also impacted
John Flynn with the Arizona Fire District Association said other Maricopa County fire districts are also facing difficult decisions.
“This is a very serious situation,” Flynn said. “It will devastate our ability to deliver services.”
In all, the county treasurer estimates it will have to pay back $329 million in property tax refunds. Hundreds of millions of dollars from all county taxing districts, including school districts, fire districts, cities and towns are on the hook to repay.
The county said 164,000 property owners will receive refunds from that bucket of more than $300 million.
“This is a situation that has occurred because of an error that the county assessor made in assessing properties, residential properties,” Flynn said.
Maricopa County Assessor inherited lawsuits impact
Maricopa County Assessor Eddie Cook was not in office when the lawsuit was filed, he said he was sympathetic to the concerns from fire districts but does not agree with the judge’s decision.
“The county assessor, in my opinion, did not make a mistake in the 2016 timeframe. I believe the judge was incorrect in the ruling,” Cook said last month.
Despite his opinion, Cook acknowledges the court’s decision has resulted in significant challenges for taxing districts, and especially those like fire districts which rely solely on tax revenue.
“I get it. It’s not fair for them. They did nothing wrong,” he said. “The county is going to try to help these particular jurisdictions that are going to suffer the most.”
But nearly a month later, no solution has been reached yet.
Since the court’s decision, state lawmakers passed a bill essentially overturning the judge’s ruling moving forward.
“The bill that we passed, it fixes this, and it won’t happen again,” Cook said.
But, the state law change is not retroactive. It doesn’t change the impact on fire districts now having to pay back millions of dollars in tax refunds, and with an 8% annual interest rate, until paid in full, according to an April notice from the county treasurer.
ABC15 will continue pressing for answers and possible solutions.
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