Property tax. To most people, it is a mystery. Some people tell me they do not pay property tax. They simply do not realize it is part of their mortgage payment. Other people think they do not pay property tax because they rent their home or apartment. Of course, the landlord is paying the tax and adding it to the rent. A house valued at $300,000 pays about $2,000 per year in property tax. Only $500 of that goes to the City of Flagstaff. A commercial building also valued at $300,000 pays about double what a residence pays.
It may be a surprise to learn that the primary property tax you pay to the City (about $200-300 per year for a residence) does little to run the City. The total primary property tax collected by the City is about equal to what the City pays as its share of employee retirement contributions (about $5 million per year). Now keep in mind, you do pay another $200-300 per year to the City for secondary property tax. These funds are used only to pay the bonds the voters have approved over the last few years.
By far, the biggest chunk of property tax you pay goes to the school district.
How much does a large retail store pay in property tax? The Safeway on Cedar Avenue pays $58,000 per year. About $5,500 goes to the City as primary tax and $5,500 as secondary (bonds) property tax. Of course, that tax is paid by you in the cost of your groceries.
The City does not run on property tax. The police, fire, parks, administration and most of the general services are primarily paid from sales tax. The one percent sales tax that goes to the City’s general fund generates about $15 million per year.
The City budget is complex. Funds come from various services but much of that revenue is restricted in its use. The amount of “discretionary” spending that the City Council gets to decide is surprisingly small. Consider your personal budget for your household or business. After you pay the “have to” expenses, how much is left? The City has the same issue, just on a larger scale. FBN