Tucson may raise property tax to cover tort liabilityPosted: Updated:
TUCSON, Ariz. -- The City of Tucson is self-insured on settlement claims. But when that money runs out in a given year and someone sues the city, taxpayers are on the hook for the bill.
A large settlement coming from a 2008 tragedy now could cause a significant property tax hike.
The City of Tucson is preparing to raise the primary property tax to almost 22%.
"The tort liability is going to go fund this property tax increase. This is a one time deal. It will come back down next year, assuming that we don't have a tragedy like that," said Councilman Steve Kozachik.
In 2008, 8-year-old Deshun Glover was electrocuted while playing at the Reid Park ball field during a thunderstorm.
An investigation found faulty underground electric wiring caused Glover's death, so the city paid Glover's family a settlement of more than $1 million.
"As a city we engage in a lot of activity that exposes us to liability. So, we set a side money each year to pay off claims and potential judgments,"said city attorney Mike Rankin.
Rankin says the city is self insured on liability claims up to certain dollar amount.
After those funds are used up, the bill goes to the taxpayers.
"When we have to pay out on judgments it comes out of the city's self insurance fund and basically we pay a premium into our own coverage," said Rankin.
The result is that property owners could be digging deeper in their wallets if mayor and council approve the increase.
Some residents aren't too happy.
"The city and county have both been self insured for years and years and years and they've had lots of discussions about changing that. They may have to because we can't pay for every mistake that is made by the city or the county," said Tucson resident Bruce Cole.
The tax hike is a tough sell for a city that is already dealing with cuts to services and a potential hike to things like water.
"People are going to be upset at seeing water rates go up, property tax go up. Some years it's going to be more, some years its going to be less, and the way we pay those is through the taxes, unfortunatley," said Kozachik.
The mayor and council are expected to hear from the public about the primary property tax increase at Tuesday night's meeting.