An update on the school tax issue – straight from Sun City, AZ

Don Grady is a CPA and Professor of Accounting at National Louis University, Chicago

The Frugal Forum column on June 20, 2013, discussed the possibility of establishing our own school district in Sun City, Huntley as a means of receiving some relief from our ever increasing property taxes.

In that article, I cited a letter to the editor that made reference to Sun City West in Arizona. That community’s website stated that “most of Sun City West was removed years ago from the surrounding school district. As a result, a typical property tax on a $395,000 home is less than $1500 annually.”

I was intrigued to learn that an adult-based community had achieved exemption from paying property taxes for school districts. Sue and I had been planning an extended journey of the western United States for some time. We would be visiting over 20 states and Canada, traveling over 7,350 miles in about six weeks.

We decided to add a stop at Sun City West to learn as much as we could about that community and how they accomplished the exemption from school district taxes. Our visit to Sun City West started at their Visitor Center. Similar to our Sun City, Huntley center, their visitor center is staffed by volunteers. We had a long discussion with two of their staff, who shared with us how their association operated.

Sun City West is currently a community of over 15,000 homes. The majority of their community is situated in an “unincorporated” area of Arizona, northwest of Phoenix. The staff members had been in Sun City West for over 10 years but were not familiar with the early history of how the community was formed.

They referred us to their community library, where there was historical records of how Del Webb formed his development company and acquired the land for Sun City West in the late 1970s. Construction continued until the late 1990s. We visited the library and met with the resident librarian, who helped us research several texts that documented the formation of the Del Webb Development Company and the acquisition of the land.

The documents discussed in great detail how Del Webb built the recreational amenities and retail facilities to support the community. Sun City West is much more extensive than Sun City, Huntley and much more self-sufficient. The community association of volunteers is wide-ranging, reducing the need for contracted services. For example, volunteers comprise a security team, or posse, that minimizes the cost of police coverage in the community.

Maintenance and upkeep of the common properties is also substantially done by volunteers. The result is that association fees are less than $400 per year. Unfortunately, we could not find the details of how the original geography of Sun City West was exempted from school district taxes. From our discussions with the staff and the research librarian, they attributed the exemption to the “unincorporated” status of the community. According to the librarian, the county has attempted to challenge the “unincorporated” status on a number of occasions. The community has elected to retain the status to minimize the taxes.

Since my June 20 column, I have received a number of communications from our Sun City, Huntley community. I have asked members of our community who have legal expertise to chime in on the plausibility of getting relief from school district/property taxes or realigning school districts so that we have our own district for Sun City, Huntley. So far, there are no takers.

We are not in an unincorporated area like Sun City West, AZ. I am a bit perplexed and frustrated that we can’t seem to find viable solutions to this predicament. After our upcoming community board elections, maybe our new board members will have fresh ideas to move this agenda forward.

•Send your questions and ideas to: Sun Day, Frugal Forum Column, P.O. Box 7505, Algonquin, IL 60102, or, by email to: thefrugalforum@gmail.com

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