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Your Property Tax Bill and School Funding

Basics of School Funding

  1. Our budgets are based on various formulas which in the most basic form is $4,500 per elementary student and $4,900 per high school student.
  2. Once we determine the budget based on the formulas, we then look to where the revenue will come from to match the budget.
  3. The first component is how much the state will contribute towards that educational cost.
  4. The second component, the remainder, comes from individual taxpayers in the district.
  5. We take that remaining cost, divide by the total Assessed Valuation in the District, and that sets the tax rate.
  6. There is a second component of cost for debt service and overrides for Prescott Unified School District which is fully funded by the local taxpayers on the Secondary Assessed Valuation.

Misconceptions and Facts

  1. Our taxes went up because the schools are spending more. Prescott Unified School District has reduced our budgets by more than $7.8 million in the last 6 years. Staff was also reduced during this time by 109 positions.
  2. If the school’s budgets went down, I should be paying less. That depends on how much the state has contributed towards that educational cost (State Aid). In 2008-09, the state contributed 15% to Prescott Unified School District; in 2012-13, the state contributed less than 1%. The amount contributed is based on the Qualified Tax Rate (QTR) which is set by the legislature.
  3. All districts/cities in the state were affected the same on their tax bills. The average decrease in primary assessed valuation in Prescott was 8%. However, we’ve seen many areas where the homes maintained the value or increased in value, increasing their tax bill.
  4. Prescott Unified School District is spending more on their debt service. Prescott’s bond payment increased by approximately $30,000. This was due to the principal increasing based on the bond payment schedule.

So What Happened?

  1. Assessed valuations decreased across the state. If everything held the same, the increase in the QTR would have offset the decrease in values, making the tax BILL stay the same.
  2. However, different areas, even within a subdivision, had different changes in their assessed valuation. These are values set by the Yavapai County Assessor’s office.
  3. If your assessed valuation reduced greater than the average district’s decrease in assessed valuation, your tax bill went down.
  4. If your assessed valuation stayed flat, your tax bill went up.
  5. If your assessed valuation went up, your tax bill went up more.

What Can I Do?

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