Back a few years ago, Whispering Ranch five acre parcels were selling the in $7,000 to $10,000 range. And the property valuations were in line
with the sale prices, so there was not a major issue with annual property taxes in the $100 to $140 range for your average five acre parcel. Then,
in late 2004 to late 2005, there was a "land rush" and I watched prices for a five acre parcel increase astronomically up to around $85,000 to $95,000
before we went into our current slump. Since values have retreated from those all time highs somewhat, an average parcel in the current market will sell
in the $70,000 to $75,000. In early 2007, the Maricopa County Treasurer started looking at what had happened to land values, and in conjunction with
the Maricopa County Assessor's Office, began to raise property valuations to bring them in line with actual sales prices previously recorded. These increases
in the value of properties were anywhere from 400% to 1000%. But they also presumed that there would be area growth and they have added on these
growth figures to the documented rise in sale prices. That projected growth hasn't happened, and the market "adjusted" downward. What we are finding is that the Treasurer's
Office and the Assessor's Office are not responsive to this downturn, since when you protest your valuation they are generally unwilling to reduce the valuations
by any significant amount. So, in their mind, values are increasing, but as we can all see from the current market, they are not. They have actually declined
in the 40% range from the all time high point.
I have had letters, phone calls and e-mails from a large number of property owners who are not too happy with this increase in valuation, and some owners
who indicate they actually cannot afford to pay these tax increases, and may be forced to sell their property. That would be tough to do in this market, since the Real
Estate market in general is severely depressed. I have advised people to hang on until this current "adjustment" turns around, but despite my optimism, it looks like
things will get worse before things turn around and head the other way. Recent economic forecasts reinforce those timeframe projections. I think that the first half of 2009
may be even worse than 2008, but we should bottom out by the end of the year and start on the road to recovery. And with all of the parcels currently on the market,
we will have to start selling off the existing inventory before the market swing upward will take place. So it might be a long wait.
From the time that we became a state, Arizona's economy was based on the "Three C's" - Copper, Cattle and Cotton. They have added two more "C's" in the last
fifty years, Climate and Citrus. Previously we were an agricultural based economy, but in the last few decades, we have developed into a broad based economy
with plenty of light electronic manufacturing for the Defense industry, a whole load of financial service companies, and rapid growth of tourism. But thank God for
the foresight of our farmers, ranchers and cattle men. Arizona still has a strong agricultural segment of our economy and they have maintained quite a bit of political influence. One
of the items that the Cattle Industry has kept in place is the "Agricultural Exemption". This allows a property owner to pay a reduced tax rate if their property meets
the requirements and the property is leased to a Cattle Company for the purposes of cattle grazing. The parcels in Whispering Ranch meet those requirements for this exemption in
most cases. I have been in touch with a company that has a large number of properties under lease in Whispering Ranch, and they are interested in acquiring more "Pasture Leases" or
"Grazing Leases" to add to their current inventory.
There is a little work involved on your part, and it will cost you $50.00 per year that you will have to pay to the Cattle Company. This fee basically helps them in
processing paperwork so that the Assessor's Office can classify your property with the Agricultural Exemption. The lease agreements are for a period of three years
and will terminate upon the sale of the property. So, if you are granted this exemption and decide to sell your property, the new property owner would have to make the
decision to enter into a new lease agreement or just pay the higher
tax rate when the lease ends. From where I sit, it is a good investment to pay this $50.00 per year if it will significantly reduce my property taxes. I researched the difference in
the taxes, and in 2006 there were two Whispering Ranch properties side by side - pretty much identical. One paid the normal tax rate of $108.00 that year. The adjoining parcel had
the Agricultural Exemption and the taxes were $9.80 for the same tax period. And if the taxes on a parcel follow the valuation amount, this saving will be even more
signficant once the new tax bills come out!! It could amount to hundreds of dollars saved every year. I don't know how much my taxes will rise in 2009 - the Assessor may reduce the
tax rate somewhat, but you can bet that the taxes will rise.
I had two parcels in Whispering Ranch, and I went through the process to get this exemption for my parcels. I was told that it's too late to get things
in place for 2008, so I guess I'll pay the higher tax rate that year and start saving on taxes when the 2009 tax bills hit the street. (Update as of February
2008 . . . Oops . . after a meeting with the folks in the Assessor's Office it now looks like they can't get everything into the system until 2010 . . . oh well,
I'm learning this stuff as I go through the process.)
It has come to my attention from a number of property owners that even though the parcel valuations are going down, the actual dollar amount of taxes
they will pay is on the increase. Evidently, since Maricopa County is running at a deficit, they are increasing the tax rate to generate more money. So even
though your parcel isworth less, you will be paying more taxes on it. And there's no end in sight. As long as the County is deficit spending, they will try to
make up forthe shortages by raising taxes. And when the County recovers from the current downturn, they won't have to raise the tax rate, they will let more
sales activityand price increases raise the valuation of the properties. Heads, they win . . Tails, you lose !!
I have been getting a lot of positive input from those folks who are taking advantage of the Grazing Leases and the Agricultural Exemption from taxes.
Maybe you should consider this for your properties too.
Here are the forms you will need (though Maricopa County does require that you use their 3-part carbonless forms when you submit your application)
these will get you started. And the backup information is here as well. It probably would be a good idea to print up all of this stuff and read through it so
you are somewhat familiar with it when you call and ask for their "specific" forms. And feel free to contact the Cattle Companies and the staff in the various
offices. If you approach them, they will normally be pretty helpful.
Agricultural Land Use Application (DOR 82916)
Statement of Agricultural Land Lease (DOR 82917)
After going through this process a number of times, Mark Lee of the B&J Cattle Company has put a system in place to do all the groundwork for you
to enter into a Grazing Lease with his firm, and he does all of the paperwork to get the Agricultural Exemption for your parcel. All you need to do is to get
in touch with him, identify your Whispering Ranch parcel, and he will take it from there. Feel free to contact hime however you wish, by U. S. Mail, e-mail
or by Phone.
Late in January, I got an e-mail from a woman who owns three parcels in Whispering Ranch. She was advising me that her application for the Agricultural Exemption
had been denied by Maricopa County. Up until that point, I had received e-mails from other owners who were pleased with the fact that their property had been granted
this Exemption under State Statute, so I was a little disturbed. I sent an e-mail up to Mark Lee at B&J Cattle Company to see if he was aware of any other owners who
had made application and had been denied. Soon after that, Mark e-mailed me back that the County had decided that his Cattle Company was "not on the County approved list"
for the 2011 tax year, despite all his efforts in providing the information needed to bring him into compliance. He had been furnishing information to them since October
of 2009. If you want to see the e-mails back and forth and what the County was demanding and how he was working to meet their requirements, send me an e-mail and I'll send
you copies of the correspondence. What it all finally boiled down to was they wanted to count his cattle. But they couldn't seem to find the time in their busy schedules until the date
had passed for sending out the 2011 tax valuation statements.
I had a feeling that something like this was on the horizon when the economy went into the tank. With Maricopa County operating at a budget deficit, they are looking to
ANY revenue source, even putting in some "temporary" taxes. I had a gut feeling that they would do whatever they could to maintain or possibly even increase tax revenues
with no regard for the impact on the public at large. The Grazing Leases with a ' bona fide' Cattle Company and resulting Agricultural Exemption dramaticaly reduces the tax
bill on the land parcels in Whispering Ranch. If the average Whispering Ranch parcel pays about $400 a year in taxes and there are approximately 3400 of them, the tax income
for the County from this area would be $1,360,000. But if every parcel had the Agricultural Exemption and paid $50 (which is a high estimate of the tax amount) the County tax
income would be $170,000 - a loss of $1,190,000 in tax revenue. So the County needs to put the brakes on this process. They need the money. And, since the past attitude
of the County officials has been autocratic, I don't expect we will see any coopertion with Mark Lee at B&J Cattle Company to resolve this issue.
How will this impact you ? ? Well, if you currently are taking advantage of the Agricultural Exemption in Whispering Ranch, and if your grazing Lease is with B&J Cattle Company,
you may well see your 2011 taxes go up to the normal residential rate. I don't think that the County Agricultural Department or the State Agricultural Department can allow two different
Cattle firms to graze the same area. So if they can remove a company from their "Approved List" the Agricultural Exemption goes away . . . and Tax Revenues go up.
If you want more information, want to file a protest, object to this action or just make your voice heard, it might be a good idea to contact the Maricopa County Assessor's
office. Keith Russell is our current Assessor. I will acknowledge that he is in a tough spot with a depressed economy, but that shouldn't stop him from choosing what is right over
what is economically beneficial in the short term. You can reach him at (602) 506-3406.
After a lot of going back and forth, sending e-mails to those who had contacted me, and them sending e-mails and making phone calls to the Assessor's office, it looks like
everything is back on track. David Boisvert did go out an verify the cattle count, and made the statement to Mark Lee of B&J Cattle Company that they would be put on the
approved rancher list for the 2011 tax year. I want to make sure that if your appliactions were denied that things are reviewed and reinstated prior to the deadline for 2011.
Make sure you have something in writing - an e-mail or a letter or something - prior to the April 15, 2010 deadline date. Sadly, after the previous fiasco, I really don't trust
these guys in the bureaucracy to do what they say they'll do.
If you send me an e-mail, I'll get the information back to you to make sure you have everyone's phone numbers, addresses and e-mail addresses. OK ? ? ?
Copyright 2004-2010, J. D. Liberty