Transcript ARIZONA DEPARTMENT OF REVENUE

ARIZONA DEPARTMENT OF
REVENUE
What we ask of you; What
you can get from us
Georganna Meyer
Chief Economist
Office of Economic Research & Analysis
Arizona Department of Revenue
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PUBLIC SERVICE ANNOUNCEMENT
 URGENT: SWINE FLU UPDATE
 The Center for Disease Control has issued
this alert:
 Please discontinue the following activity:
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he Center for Disease Control has issued this alert: Please avoid the following
activity
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OFFICE OF ECONOMIC RESEARCH
& ANALYSIS
 Elaine Smith
 Karen Jacobs
 Darlene Teller
 Diane Sosinski
 Nick Buta
 Me
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WHAT WE ASK FOR
 Bonded Indebtedness/Lease Purchase
Reports
 Letters sent out annually in July
 Nagging occurs till early November
 Then we give up if you haven’t reported and put
you down as noncompliant.
 All cities and towns reported bonded
indebtedness and lease purchase information for
fiscal year 2008/2009
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WHAT WE ASK FOR
 Property Tax Oversight Commission
requirements
 Must notify PTOC in writing within 10 days of
receiving your levy limit worksheet agreement or
disagreement with the final worksheet
 Few ever comply with this
 Involuntary torts due to us on or before the first
Monday of July
 Within 3 days of a truth in taxation hearing, you must
mail a copy of the notice, a statement of its
publication and the result of the governing body’s
vote.
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WHAT YOU GET FROM US
 Numbers
 Numbers
 Numbers
 Assistance
 Numbers
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TRANSACTION PRIVILEGE TAX
 ADOR collects and distributes city and county
imposed taxes in addition to the state TPT.
 FY09 - $1.2 billion in city and county taxes
 We collect for all 15 counties and 75 cities and
towns.
 The collection and distribution of city and
county taxes includes auditing and collection
of compliance money, including A/R, billing
and collections.
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TRANSACTION PRIVILEGE TAX
 ADOR budget cuts seriously impacted the
audit and collections process.
 Money still came in because it was in the pipeline
already.
 However, nothing new was funneled into the
pipeline.
 Received $3M for this fiscal year only to hire
collectors to reduce the backlog of collections
(more than $400 million).
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TRANSACTION PRIVILEGE TAX –
SERVICES TO COMMUNITIES
 Provide Transaction Privilege Tax licenses to
businesses
 Around 200,000 monthly, quarterly and annual
filers
 Revenue sharing estimates for proposed
annexations and incorporations
 Tax base estimates for proposed annexations
and incorporations
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TRANSACTION PRIVILEGE TAX –
SERVICES TO COMMUNITIES
 Annual projections for revenue sharing
 Required by statute by the first Monday in July
 Estimates for proposed county level taxes
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TRANSACTION PRIVILEGE TAX
 Cities and Towns received 13.4% less in TPT
revenue sharing in FY2009 than they received
in FY2008. $447M down to $387M
 Of the 75 cities and towns for which ADOR
collected city sales tax in FY08 and FY09, the
total collected declined 12.1%
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TRANSACTION PRIVILEGE TAX
CITY SALES TAX
 15 of the 75 cities/towns actually had
increases in their city sales tax collections
 Douglas (tax increase), Duncan, Eagar, Gila Bend,
Mammoth, Pima, St. Johns, San Luis (tax
increase), Springerville, Superior, Taylor, Tolleson,
Wellton, Willcox, Winslow
 All 3 cities in Apache County? What’s up with that?
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TRANSACTION PRIVILEGE TAX
CITY SALES TAX
 The cities and towns with declines (60 of the
75)
 Ranged in decline from (0.4%) in Thatcher
 To (44.6%) in Maricopa
 9 with declines of greater than 20%
 20 with declines of 10% to 20%
 20 with declines of 5% to 10%
 11 with declines of 0.4% to 5%
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TRANSACTION PRIVILEGE TAX –
COUNTY REVENUE SHARING
 $627.2M shared in FY09
 $724.4M shared in FY08 – decline of 13.4%
 But the share of TPT revenues a county gets
in a fiscal year varies based on several factors
so some counties fared better than others
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TRANSACTION PRIVILEGE TAX –
COUNTY REVENUE SHARING
Apache
-11.6%
Mohave
-9.3%
Cochise
-9.9%
Navajo
-11.2%
Coconino
-10.8%
Pima
-13.1%
Gila
-12.6%
Pinal
-13.8%
Graham
-11.4%
Santa Cruz
-12.8%
Greenlee
-37.1%
Yavapai
-11.9%
La Paz
-11.2%
Yuma
-9.1%
Maricopa
-14.0%
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TRANSACTION PRIVILEGE TAX –
COUNTY REVENUE SHARING
 Good News – No county received less
revenue sharing in FY08/09 than they did in
FY03/04.
 Bad News – FY07 was a bubble. It burst. It’s
gone.
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TRANSACTION PRIVILEGE TAX –
COUNTY TAX COLLECTIONS
 One county saw growth in county tax
collections
 Apache
2.9%
 All other counties saw declines in their county
tax collections in FY09
 From -3.3% to -17.4%
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TRANSACTION PRIVILEGE TAX –
COUNTY TAX COLLECTIONS
Cochise
-4.4%
Mohave
-9.1%
Coconino
-6.0%
Navajo
-10.6%
Gila
-7.3%
Pima
-10.9%
Graham
-12.2%
Pinal
-17.4%
Greenlee
-5.4%
Santa Cruz
-9.2%
La Paz
-8.4%
Yavapai
-14.1%
Maricopa
-14.0%
Yuma
-3.3%
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TRANSACTION PRIVILEGE TAXHow a city can maximum revenue
sharing
 Pursue a certified Census count update when
you annex property with population.
 Populations used for revenue sharing are
from years ending in 0 and 5.
 Promote compliance with the next decennial
Census.
 If you do not make efforts to take advantage of
any gains you have in population, you will lose
revenue sharing
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TRANSACTION PRIVILEGE TAX – How
a city can maximize city privilege
tax collections
 Provide ADOR with rate change information
IMMEDIATELY.
 We no longer have the budget to send
notification of rate changes to taxpayers. If
you are willing to pay for notification, we can
still send them.
 We will update our website and so should
you!
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TRANSACTION PRIVILEGE TAX – How
a city can maximize city privilege
tax collections
 Understand the delay that occurs between a
rate going into effect and money being
distributed to you.
 If the taxpayer isn’t told early enough, you
won’t get your money right away.
 Pay attention to the amount of money you
receive each month.
 Pay attention to which taxpayers that are not
paying.
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URBAN REVENUE SHARING
 15% of net individual and corporate income







tax two years prior
2004-05
$365.1M
2005-06
$373.1M
2006-07
$425.2M
2007-08
$684.5M
2008-09
$727.7M
2009-10
$628.6M
2010-11
estimated
$474M
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INDIVIDUAL INCOME TAX
 Income tax abstract by city and county
 Tax year 2004 is on our website
 Tax year 2005 will be on our website within a
month
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Growth in Average Federal Adjusted Gross Income, 2005 over 1990
120.00%
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%
apache cochise coconino
gila
graham greenlee la paz maricopa mohave navajo
pima
pinal
santa
cruz
yavapai
yuma
arizona
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Federal Adjusted Gross Income by County for 2004 and 2005
$70,000
$60,000
$50,000
2004
2005
$40,000
$30,000
$20,000
$10,000
$0
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INCOME TAX CREDITS
 Maybe you pay no attention to income tax
credits, but are you aware that income tax
credits can bring money into your
community, promote purchases in your
community?
 We have an abundance of tax credits in
Arizona for a variety of different purchases or
donations.
 Downside – reduces income tax collections
which reduces urban revenue sharing
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SOLAR INCOME TAX CREDITS
 Individual Solar Income Tax Credit
 Tax credit for the lesser of 25% of the cost of solar
equipment installed on your home or $1000.
 Commercial & Industrial Solar Income Tax
Credit
 Tax credit for the lesser of 10% of the cost of solar
energy devices installed for commercial or
industrial purposes in the taxpayer’s trade or
business or $25,000
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SOLAR INCOME TAX CREDITS
 Solar Hot Water Heater Plumbing Stub-Outs &
Electric Vehicle Recharge Outlets Credit
 $75 for each installation of solar hot water heater
plumbing stub-outs or electric vehicle recharge
outlets.
 Renewable Energy Tax Incentive
 Legislation just passed this last session
 Refundable income tax credit and property tax
incentives for certain capital investment levels and
creation of new jobs in Arizona for manufacturers
of solar energy equipment.
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INDIVIDUAL INCOME TAX CREDIT
FOR CHARITIES THAT PROVIDE
ASSISTANCE TO THE WORKING POOR
 Individual income tax credit for donations to
charities that provide basic needs to low
income families
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INCOME TAX CREDIT FOR
EMPLOYMENT OF TANF RECIPIENTS
 Credit for businesses that increase their
qualified employment of recipients of
temporary assistance for needy families.
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ENTERPRISE ZONE CREDIT
 Income tax credit for net increases in
qualified employment positions of Arizona
residents by a qualified business located in an
enterprise zone.
 Parts of every county in the state is an
enterprise zone
 All of some counties in this state are an
enterprise zone
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WATER CONSERVATION SYSTEMS
CREDIT
 Credit for installing a graywater recycling
systems or a rainwater harvesting system
 25% of the cost of the system, up to $1000
 Last year 60% of the credit approvals were
for residents of Tucson.
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PRIVATE SCHOOL TAX CREDIT
 Individual income tax credit for donations to
school tuition organizations that provide
scholarships to private schools
 No restrictions as to who can receive the
scholarships
 Corporate income tax credit for donations to
school tuition organizations that provide
scholarships to private schools
 Income restrictions on scholarship recipients
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PRIVATE SCHOOL TAX CREDIT
 63% of the scholarships, $35.8M, went to
schools in Maricopa County in 2008
 None of the scholarships went to Greenlee
County
 Are there no private schools in Greenlee County?
 $677 in scholarships went to La Paz County
 Just because the majority of the money is
donated in Maricopa County doesn’t mean
that the scholarships have to stay in Maricopa
County
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PUBLIC SCHOOL EXTRA
CURRICULAR ACTIVITY CREDIT
 Credit for donations to public schools for
extra curricular activities
 63% of the donations went to Maricopa
County schools
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HEALTH INSURANCE PREMIUM TAX CREDIT
 Provides a tax credit for insurance companies
that provide insurance premium reductions
for individuals or small businesses which have
been certified by the Arizona Department of
Revenue and have obtained health insurance
within 90 days after certification is issued.
Certifications are issued on a first come, first
served basis and may be reissued up to two
times.
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HEALTH INSURANCE PREMIUM TAX CREDIT
 For individuals, the premium reduction is the
lesser of $1000 for single person coverage,
$500 for child coverage or $3000 for family
coverage OR 50% of the health insurance
premium. For small businesses, the premium
reduction is the lesser of $1000 for single
person coverage or $3000 for each employee
electing family coverage OR 50% of the
health insurance premium.
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HEALTH INSURANCE PREMIUM TAX CREDIT
 Eligible applicants include AZ small businesses in
existence for at least 1 calendar year with 2 to 25
employees in the most recent calendar year and that
have not provided health insurance to their employees
for at least 6 consecutive months before the application.
Individual applicants must earn less than 250% of the
federal poverty level, must be a legal resident of AZ and a
U.S. citizen or a legal resident alien, has not been
covered under a health insurance policy for at least 6
consecutive months before application and is not
enrolled in AHCCCS, Medicare or any other state or
federal government health insurance program.
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EXPENDITURE LIMITATIONS
 OERA is responsible for staffing the
Economic Estimates Commission which is
responsible for calculating expenditure
limitations for cities and counties.
 Likewise, we are responsible for reducing
your share of urban revenue sharing when the
Auditor General determines you have spent
more than your limitation.
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DEBT OVERSIGHT COMMISSION
 OERA is responsible for staffing the Debt
Oversight Commission
 The Debt Oversight Commission is supposed to
“review” OERA’s work in compiling information
on debt for all political subdivisions in the state
 Counties
 Cities
 Community Colleges
 School districts
 Special districts
 State Agencies
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BONDED INDEBTEDNESS/LEASE
PURCHASE DATA
 Outstanding debt by county
Pima
$757,621,667 Gila
$1,625,000
Maricopa
$167,750,000
$1,345,000
Pinal
$158,310,000 Apache
$1,030,000
Yavapai
$25,375,000
La Paz
$335,000
Coconino
$16,180,000
Graham
$0
Mohave
$15,355,000
Greenlee
$0
Cochise
$7,030,000
Santa Cruz
$0
Navajo
$5,340,000
Yuma
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BONDED INDEBTEDNESS/LEASE
PURCHASE DATA
 Per Capita Debt by County
Pima
$755.18
La Paz
$15.56
Pinal
$483.14
Apache
$13.64
Coconino
$119.94
Yavapai
$13.31
Mohave
$75.22
Yuma
$6.68
Cochise
$51.24
Graham
$0
Navajo
$46.93
Greenlee
$0
Maricopa
$42.93
Santa Cruz
$0
Gila
$28.57
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BONDED INDEBTEDNESS/LEASE
PURCHASE DATA
 City debt as of 6/30/2008
 Phoenix $6,310,662,171
 Mesa $1,154,446,000
 Scottsdale $1,114,224,960
 Tucson $1,009,012,144
 Glendale $926,447,502
 Tempe $651,395,000
 Gilbert $383,845,000
 Chandler $351,435,000
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BONDED INDEBTEDNESS/LEASE
PURCHASE DATA
 City debt as of 6/30/2008
 Clifton







$40,000
Pima $105,000
St. Johns $147,853
Huachuca City $151,000
Colorado City $190,205
Patagonia $217,931
Jerome $261,896
Tombstone $534,000
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BONDED INDEBTEDNESS/LEASE
PURCHASE DATA
 No debt as of 6/30/2008
 Carefree, Dewey-Humboldt, Gila Bend, Globe,
Hayden, Litchfield Park, Mammoth, Maricopa,
Miami, Springerville, Star Valley, Wellton,
Winkelman, Youngtown
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CONSTITUTIONAL DEBT LIMITS
 Who is closest to their debt limit for general
obligation bonds?
 Tolleson – 69.8% of debt limit used
 Goodyear – 65.4% of debt limit used
 Tempe – 65.3% of debt limit used
 Glendale – 43.8% of debt limit used
 Phoenix – 33.6% of debt limit used
 Lake Havasu City – 31.2% of debt limit used
 Scottsdale – 30.5% of debt limit used
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BONDED INDEBTEDNESS/LEASE
PURCHASE DATA
 Per Capita City Debt as of 6/30/2008
 Cave Creek $10,078
 Williams $9,485
 Queen Creek $8,320
 Sedona $6,472
 Tolleson $6,246
 Cottonwood $5,221
 Scottsdale $4,640
 Tempe $3,880
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PROPERTY TAX LEVY LIMITS
 Crib sheets for property tax levy limits
 Technical Assistance
 Including help with truth in taxation
 The September 2008 meeting
 Sierra Vista did not limit their 2008 levy as
required for not holding a truth in taxation hearing
in 2007
 Pima over-collected by $790
 Casa Grande over-collected by $39,751
 Coolidge over-collected by $58,343
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PROPERTY TAX LEVY LIMITS
 September 2008 meeting
 Truth in taxation violators
 Benson, Douglas, Miami, Gila Bend, Holbrook,
Mammoth, Superior, Apache County
 Call us for help!!!!!!!!
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TRANSFERS FOR WHICH OERA IS
RESPONSIBLE
 Rio Nuevo
 Phoenix International Raceway
 Tribal Community Colleges
 Phoenix Convention Center
 Sports and Tourism Authority
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