If you read The Skinny in last week’s Tucson Weekly, you’d know that Mari Herreras broke the story that Republican Joe Higgins, who is challenging Pima County Supervisor Ann Day, was running a commercial trash-hauling business out of a home that he had listed as owner-occupied residential on the property-tax rolls. That translates into a property-tax savings of more than 50 percent and allowed him to take advantage of a special tax rebate for homeowners who aren’t renting out their homes.
We have to thank Mark Kimble of the Tucson Citizen for bringing up the story on KUAT-TV’s Arizona Illustrated last week in the debate between Day and Higgins. The mainstream media often ignores TW’s reporting, so it was great to see Kimble step up and acknowledge the importance of our investigation.
Day took advantage of the exchange to take some shots at her opponent. She also mentioned another story broken by TW and ScrambleWatch: Higgins’ failure to vote in most primaries, city elections and bond elections over the last two decades.
KUAT has been posting the debates online, so if you missed it, you can see it here.
Higgins has responded with press releases downplaying the property-tax mix-up and accusing Day of going negative.
Here’s Mari Herreras’ original piece from last week’s Skinny:
When Republican Joe Higgins first announced his campaign against Pima County Supervisor Ann Day for her District 1 seat in the upcoming Sept. 2 GOP primary, the Tucson businessman said he was inspired to run because of the rising property taxes.
Those high tax bills might explain why Higgins is running his commercial trash-hauling business out of a property that he has listed as “owner-occupied residential” with the Pima County Assessor’s Office.
In 2006, when Higgins bought the property at 1520 N. 15th Ave., along with a vacant lot next door where he parks his garbage trucks, he indicated on documents filed with the county that the house would remain owner-occupied.
That netted him a nice savings of more than 50 percent on the property-tax bill, because he was able to keep the residential tax rate and enjoy a special education tax rebate reserved for homeowners who live in their homes. Higgins paid $640 in taxes on that property during the last year; had he been paying the commercial rate, his bill would have been more than $1,300.
The assessor’s office divides property into various types, including residential, commercial and vacant land. Property taxes are based on a certain percentage of the property’s valuation. For residential, it’s 10 percent of its assessed value; for commercial, it’s 23 percent; for vacant land, it’s 16 percent.
According to Pima County Assessor Bill Staples, it’s up to the property owner to report any changes in the use of the property. Notices go out to property owners each year with the valuation information for the current and previous years, along with the property classification. The notice specifically asks the property owner to notify the county assessor if the use has changed.
Oddly enough, Higgins has the property listed on his campaign financial-disclosure form as a residential rental property. He told The Skinny that he rents the property to his garbage-collection business. But when asked why the property is listed as owner-occupied residential when it is actually used for a business, Higgins said it must be a mistake. He’s since contacted the Assessor’s Office to determine how much he should be paying in taxes.
It’s not a huge amount of money, but here’s what we’re left wondering: How much credibility does Higgins have on the topic of property taxes when he doesn’t even understand the difference between owner-occupied residential property and commercial property?
Incidentally, Higgins won’t be subject to any penalty if and when the classification changes. A few years back, the Arizona Legislature passed a tax-reform package that does not penalize property taxpayers if it’s discovered that they’ve been cheating on their taxes–provided they accept the new classification in future years.
Here’s Higgins’ press release after the program aired:
On the Thursday edition of Arizona Illustrated the incumbent Supervisor for District 1 made some wild accusations about my property tax situation. Here are the facts. I own or have an interest in several properties in Pima County. For the tax year 2007 I paid over $39,000 in real estate taxes on these properties. In November of 2006 I purchased a property with industrial zoning for one of my businesses. It came to my attention that this property might be incorrectly classified with the county assessor. Upon finding this out I immediately contacted the assessors’ office and received conflicting answers. I quickly followed up and requested a full field audit in order to clear up this issue.
I have been blessed in my business ventures and in life in general. The thought that I would intentionally misclassify a property in order to save a few hundred dollars is absurd. I have always worked diligently to pay my fair share because it is the right thing to do.
If I owe one penny more in taxes I will pay the full amount, as I always have. I was shocked at the accusatory tone that my opponent took in a public forum and believe that the voters of District 1 deserve a vigorous debate on the issues, not personal attacks.
I have been open and accessible on this matter from the first moment that is was brought to my attention and will happily discuss and clarify the situation if you have further questions.