Property taxes supporting Pima Community College to rise 3%

Pima Community College is raising property taxes, though the majority of local residents may hardly notice the increase that will directly support the college.

The college’s Governing Board voted 4-1 Wednesday night to approve both a 3% rise in property taxes and a $367.5 million budget for fiscal year 2024, which starts July 1. Luis L. Gonzales voted no on both.

For close to a decade, community colleges across Arizona have received minimal state funding, which makes up around 2% of PCC’s budget. Property taxes make up 37% of revenues, while the rest comes from a mix of tuition and fees; grants, contracts and financial aid; and college equity.

The increased taxes will generate roughly $4 million in extra money for PCC to put toward its operations costs this year, but the rise will cost the average homeowner less than the price of one meal at a restaurant. Without the increase, the owner of a property valued at $100,000 would pay $124.29 a year in taxes to support PCC. With the new increase, the same property owner will pay $128.02 a year.

Compared with the nine other counties in Arizona supporting community colleges, Pima County has the fourth-lowest property tax rate in the state.

“I can assure you,” said David Bea, PCC executive vice chancellor for finance and administration, “the $4 million is critically important for the college to support its operations going forward.”

Spending priorities

Raising wages, capital construction and infrastructure, and advancing the college’s strategic plan are some of the top spending priorities for next year.

Last year the board approved a new pay structure designed to compensate employees on a scale that accounts for years of service and experience levels.

According to a presentation Bea gave to the board Wednesday, $6.7 million of the new budget is expected to go toward salaries and wages.

Nearly $60 million will go toward deferred maintenance, equipment costs and the continued buildout of the Centers for Excellence, which is outgoing Chancellor Lee Lambert’s vision for expanding workforce training opportunities at PCC for in-demand careers. Lambert is leaving July 31 to become chancellor of Foothill De Anza Community College District near Silicon Valley, California.

Just before he announced his departure, PCC opened the latest phase of the project — a $35 million, 100,000-square-foot advanced manufacturing building.

A recent budget proposal for the Centers for Excellence showed the college would need $43.4 million in future funding to fully complete the project, which is likely still years away. The proposal estimated a need for about $20 million in fiscal year 2024 to go toward in-progress and new projects related to the centers.

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Historic hotels, chancellor search on docket

The board will also weigh in the coming year how to proceed with three historic yet decaying hotel properties the college owns on Drachman Street north of downtown Tucson. It approved the purchase years ago, with the intention of restoring and adaptively reusing the buildings, and set aside $10 million to start the project.

But recent cost estimates put the project proposal approved by a previous iteration of the board at $35.7 million. It’s unclear if this new board will vote to fund the renovations.

Chair Theresa Riel said it won’t make that decision for at least another six months while it continues to gather public comment.

Moreover, Riel said, the board’s attention right now is on hiring a new chancellor. At the meeting Wednesday, the board postponed the appointment of an interim chancellor and has not revealed its precise plan for finding a permanent replacement for Lambert.

But now that the board has passed a $367.5 million budget, it will be able to decide exactly how much money it wants to allocate to those two big construction projects in addition to all of the college’s other projects and initiatives.

Investing in enrollment

Greg Taylor, who took his position on the board in January and voted for both a recent tuition increase and the property tax increase, said investing in enrollment is one of his biggest priorities in the next year.

According to the most recent Arizona Auditor General’s report, PCC experienced a major enrollment decline over the past decade, from 19,514 full-time students enrolled in 2013 to 11,563 in 2022. The economic uncertainty of the pandemic contributed to some of the fallout (PCC lost more than 5,000 students between 2013 and 2019), but enrollment is slowly recovering.

“It’s certainly my expectation that the college is going to do something significant on the expense side of that equation,” Taylor said, “to put us on a track for better financial sustainability where we’re not increasingly relying on the shoulders of Pima County taxpayers and students and their families when we’re serving significantly fewer students than we were before.”

Taylor added that “the only way” he’d vote for another increase to property taxes or tuition next year is if PCC does “something meaningful and realistic on the (financial) side of the equation.”