CLARKDALE - Protesting the assessed valuation of your home is one of the few legal avenues taxpayers have to reduce their tax burden, even if it does place a burden on their neighbors.
Typically, though, the total amount of all the adjustments made each year is minimal as far as their impact on other taxpayers.
That, however, will not be the case if Salt River Materials Group, owners of the Phoenix Cement Plant in Clarkdale, prevails in a suit recently filed in Yavapai County Superior Court.
SRMG is seeking a $60 million reduction in the assessed value of the company's personal property at the Clarkdale plant -- that is to say the value of the plant itself, not the land on which it sits.
The plant is currently valued at approximately $111 million. The county assessor's office says it's worth closer to $128 million. SRMG says it is worth exactly $56,944,903.
Bad timing
In a statement sent to Verde Valley Newspapers, SRMG President and CEO Roger Smith stated that the company's appeal is based on provisions in state law that allow for "temporary valuation relief when economic conditions adversely reduce the value of an asset."
The request is for a one-year reduction only.
SRMG began upgrading the plant in 2002, spending about $115 million for a hi-tech, high-capacity kiln and other ancillary equipment.
According to Smith's statement, the plant operated at 29 percent of capacity last year and is projected to drop an additional 5 percent this year.
"We are currently experiencing the worst economic conditions the cement industry has faced in the last 50 years," Smith states, "We must do everything we can to minimize our costs. Essentially there is no expense item which we can avoid."
Previous reductions
This is not the first time SRMG has protested the plant's value in recent years.
In 2009, they were granted a $2.4 million reduction by the board of supervisors, acting as the board of equalization.
The board agreed to the reduction because they felt a state tax guideline, which requires that interest paid for personal property be included in the value of that property, was unfair and amounted to "double taxation."
In July 2010, the board of supervisors reduced SRMG's assessed value by an additional $5.7 million, based again on the board's aversion to including capital interest in the plant's assessed value.
In both instances County Assessor Pam Pearsall's office argued that given state law, it is unfair to eliminate SRMG's assessment for capital interest while others are still being assessed.
Reduction realities
The board of supervisors' two previous decisions to reduce the plant's value has reduced the property taxes on the Clarkdale plant by $253,384 according to Pearsall.
They translate to a reduction of $71,000 of the company's Mingus Union taxes, $64,000 for Clarkdale-Jerome School District, $52,000 for Yavapai County and $51,000 of its taxes paid to the Yavapai Community College District.
By SRMG's own estimates, the $60 million reduction requested in the lawsuit would lessen the company's tax burden by an additional $761,000.
It is a figure Pearsall calls "huge" and the largest ever requested in county history. And one, she says, that will have a significant impact on taxpayers who pay taxes in the same taxing districts as the cement plant.
"The reductions to Phoenix Cement's valuation do not affect the budgets for the various taxing districts. They will have to shift the tax burden to someone else," Pearsall said.
Off to court
The board of supervisors has since decided that appeals regarding the value of personal property should go before a state-appointed hearing officer because of their technical nature.
When Phoenix Cement went before the hearing officer earlier this year they received less than the valuation they were seeking.
SRMG subsequently filed an appeal in Superior Court. On April 7, the board of supervisors voted to hire a firm that specializes in defending tax appeals, for an estimated $80,000.
According to Pearsall, by filing in court, SRMG has opened the entire assessment to scrutiny, including the two previous reductions given by the board of supervisors.
"Now that they have filed with the court, we will be able to argue for what we believe the value should be, with the capitalized interest in there," Pearsall said.
In his statement to Verde Valley Newspapers, Smith stated that the company is only seeking the opportunity to pay their fair share.
"The facts are uncontroverted that we have experienced massive economic impact from the current market conditions," he stated.
"We filed our appeal in order to make sure we did everything we could, under Arizona law, to pay the correct property tax amount. No more, no less."
A court date has not been set.
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