Homeowners in a north Scottsdale neighborhood have avoided paying school district taxes for years, but their luck has finally run out.
A new law signed by Gov. Janet Napolitano in May will force more than 3,000 households in the Pinnacle Peak area to join a school district or form their own.
Only about 250 public school students reside in the area, yet the other households there soon will be responsible for paying hundreds or — in some cases — thousands of dollars more per year.
Despite the cost, one Troon mother said she can’t wait to join a district.
Cassandra Perkins said she embraces the idea of paying higher taxes because of the benefits that come with belonging to the school district where her daughter, Marietta, 7, attends Pinnacle Peak Elementary School. Currently, she cannot vote in school board elections or vote for bond issues and capital overrides.
"If you don’t belong to a school district you don’t have any rights, your kids don’t have any rights," Perkins said.
Perkins lives in an area known as an "unorganized territory," meaning its residents do not belong to any school district and pay much lower property taxes than families living just a few miles away.
While the area is sandwiched between the Scottsdale, Cave Creek and Paradise Valley unified school districts, residents do not pay local school taxes.
"They pay into the state general fund, but so does everybody else," said state Sen. Linda Gray, R-Glendale, the primary sponsor of the law that forces such areas to join districts. "Therefore, the rest of us taxpayers are helping to support that area, and that is not a fair solution."
When the area is annexed, residents of the yet-to-bechosen school district will likely see a slight decrease in their overall tax rate, since more people would be sharing the financial burden, said Michael Hunter, vice president of the Arizona Tax Research Association, a privately-funded taxpayer watchdog organization.
But the lowered tax rate won’t exactly provide a windfall, said Tom Elliott, assistant superintendent of business services in the Paradise Valley school district. "If it lowered (the tax rate) by 1 percent, I’d be shocked," he said.
Currently, the Maricopa County schools superintendent’s office issues Certificates of Educational Convenience to children living in unorganized territories guaranteeing them entrance to any neighboring district.
The vast majority of students living in the area --nearly 170 children — attend school in the Paradise Valley district, with most going to Pinnacle Peak Elementary School.
About 50 children in the area have chosen to attend Scottsdale schools, and a handful go to Cave Creek.
When Perkins moved into the area in 1998, she thought living outside a school district sounded like a good deal.
"When they told me I got to choose from three school districts, I thought it was great," she said. "But it wasn’t."
Besides not being able to vote, she says she feels a bit like an outsider, she said.
When her daughter started kindergarten, Perkins planned to send her to the Scottsdale district. But then she discovered another downside to being outside a district — she couldn’t choose a particular school.
At the time, Scottsdale officials told her that Marietta would be bused 14 miles south to Navajo Elementary School.
This is a common problem for parents in unorganized territories, said Maricopa County Schools Superintendent Sandra Dowling.
"What makes parents mad sometimes is that the district can send them to any school they want," Dowling said. "I’ve had some districts play games and put the kid on the longest bus route. That’s just not fair."
While parents in these territories have long seen their disadvantages, it has historically been hard for them to convince their neighbors -most of whom do not have school-aged children — to join a district.
Voters in two past elections rejected district annexation.
The majority of home buyers in unorganized territories are pleased to find out they do not have to pay school property taxes, said Shirley Bane, a real estate agent in the Pinnacle Peak area.
In 2001, state Sen. Carolyn Allen, R-Scottsdale, helped bring a bill forward that would have forced parents to decide, but it did not pass.
"Some folks up there said they moved up there because they didn’t have any school property taxes and they thought it wasn’t fair to change that," she said. "Well, we felt that it wasn’t fair folks had children and were sending them to school and they didn’t want to pay school taxes."
Last March, lawmakers decided enough was enough and passed a bill forcing residents of any unorganized territory with more than 150 students to either join a school district or form one.
Allen said she was surprised that it "flew under the radar screen" and passed without much opposition.
With some homes in the upscale neighborhood selling for more than $1 million, the difference between being in or out of a district can be huge.
In 2004, the homeowner of a house assessed at $1.8 million in the unorganized territory would have paid $3,407 in school taxes.
If that house were to join the Paradise Valley district boundaries, taxes would rise to $9,390.
That’s all money that local schools are missing out on, and it strikes Judie Cosme, whose two children attend Paradise Valley schools, as wrong.
"We should be paying taxes. We are not a retirement center, we are in the center of town," Cosme said. "We all feel guilty."
Many of the parents donate extra money and volunteer hours to make up for the lost tax revenue.
Cosme believes that as all the unorganized territories begin to pay their share of school taxes, the money will fund better education, raise teacher salaries and decrease the need for more capital overrides.
The assessed value of all the unorganized territories in Maricopa County is $809 million, according to the Arizona Tax Research Association.
"We need to fill in these holes so it levels the playing field, and our little area can set a precedent," Perkins said.
At parental urging, the Paradise Valley district agreed to hold elections on Nov. 8. to allow the area to join the district. Both residents of the school district and of the territory must approve the annexation.
Richard Stein, the father of two preschool-aged children, lives in the Desert Highlands community and said he would support annexation.
"We don’t have enough schools up here," he said. "It used to be all retirees 30 years ago, but we can’t still live like 30 years ago. There are more families than ever up here."
Perkins said she worries that, if given a choice between the Scottsdale and Paradise Valley districts, voters in the area will choose Scottsdale due to its lower tax rate.
Scottsdale governing board members have already discussed the issue, and at a meeting last month, schools Superintendent John Baracy listed reasons why parents might choose the Scottsdale district.
"Our innovative programs, lower tax rate and greater convenience — that’s our trifecta," Baracy told board members.
But that’s not in the best interest of the children, several mothers said, because most of the children in the area attend Paradise Valley schools, and joining that district would cause the least amount of disruption.
"(Paradise Valley) has always supported us and is even looking at building a middle school closer to this area. They are poised and ready to accommodate our growth," Perkins said.
She would prefer to join a district soon. If the optional Paradise Valley election in November fails, the new law requires residents of the area to hold a special election in which they would have to choose one of the adjacent school districts.
"It’s inevitable," Perkins said. "We can take the easy route and vote this time, or we can take the battle route and be told what to do."