Queen Creek hit with $400K in refunds from county tax lawsuit

A ruling in a class-action lawsuit that resulted in the revaluation of 200,000 homes in Maricopa County is forcing hundreds of entities, including Queen Creek, to collectively refund millions of dollars to taxpayers.

Queen Creek is refunding almost $400,000 in property taxes from 2015 to 2021 as a result of the ruling.

“The town’s share of the refunds, just under $400,000, will show up as deductions to our regular monthly property tax distributions from the county throughout the next fiscal year (July 1, 2024-June 30, 2025). The amount is factored into the town’s budget and will not have a material impact,” according to a statement from Constance Halonen Wilson, communications and marketing manager for Queen Creek.

In May, the Queen Creek Town Council approved a final $723.8 million budget for the 2024-25 fiscal year – 17% smaller than the current fiscal year’s $867.1 million budget. In early June, the council voted to cut the primary property tax rate from $1.72 to $1.63 per $100 of assessed value as the town enters the second year of a property tax freeze.

Compared to other cities and towns in the county, Queen Creek’s refund is less bruising.

For example, Gilbert must refund close to $1.5 million, while Chandler is on the hook for almost $2 million. As the county’s largest city, Phoenix is taking the hardest hit at more than $13.3 million, according to county documents.

The ruling also hits school districts, including the Queen Creek Unified School District which must refund $1.5 million.

“Like many districts, QCUSD has been in communication with the Maricopa County Schools Superintendent’s Office following this judgment,” according to a statement from Amanda deNight, director of marketing and public relations for QCUSD. “Recent action taken by the state Legislature has authorized the (Arizona Department of Education) to recalculate the basic state aid for districts liable for Qasimyar v. Maricopa County tax refunds without the request of districts.”

The QCUSD statement added that the district “will continue to monitor this situation and work within the statutory requirements to ensure compliance and communicate as required” to the state’s Property Tax Oversight Commission.

"I think it is important to convey that the (Maricopa) County Assessors Office is the entity responsible for calculating the amount a taxpayer is responsible for," stated Jennifer Revolt, president of the QCUSD Governing Board, in an email. "This was not an oversight or misculation made by QCUSD, or any other school districts in Maricopa County for that matter. "

The refund was discussed during a special board meeting on Tuesday in which the district’s fiscal year budget was introduced, said James Knox, a member of the QCUSD Governing Board.

“It’s (the refund) a lot but in the grand scheme of things – I don’t want to make it sound like it’s not a lot of money – but it’s not as bad as some of the other districts that are impacted.”

For example, the Higley Unified School District must give back $3.4 million over the affected tax years, Gilbert Unified School District must refund $5.4 million, and the Chandler Unified School District has to give back almost $14 million.

"Based on the amount for Queen Creek, it is going to be a very minimal impact," Revolt stated..

QCUSD’s proposed budget for its upcoming fiscal year is $142.9 million, which includes more than $15 million from the unrestricted capital fund and $12.7 million in federal projects. The board will be voting on the budget on Tuesday, July 9.

Knox said he is hopeful that the refund could be easily “washed out” by the district’s rapid student growth.

“The actual overall (budget) impact would basically mean that we would probably end up having slightly less money to spend per student,” Knox said.

He added that it is still unclear how the refund issue will be resolved by the district and that staff at the meeting “kept saying that every day there’s new information on the county’s website.”

QCUSD’s deNight stated that the district “will be required to levy this, similar to how tax judgments and resolutions are handled. We look forward to sharing more information with the community when the district receives further direction.”

In all, the ruling affects at least 18 Arizona cities or towns, 32 elementary school districts, 16 school districts, Maricopa County, community college districts, street lighting districts and fire districts among others, according to the list on the Maricopa County website.

In 2021, the Arizona Court of Appeals upheld a decision that the county incorrectly taxed residences that went from primary use to non-primary, and vice-versa, from 2015 to 2021. The lawsuit was filed by Maricopa County resident Ahmad Zaky Qasimyar.

In 2022, the Arizona Legislature passed a bill that said property owners who change between primary and non-primary residences or vice versa will not trigger a change in use for tax purposes.

Daily Independent Lead News Reporter Brent Ruffner and Sun City Independent Reporter Scott Tynes contributed to this story. We’d like to invite our readers to submit their civil comments, pro or con, on this issue. Email AZOpinions@iniusa.org. Janet Perez can be reached at jperez@iniusa.org.