No appeal to Xanterra judgement
The County Board of Supervisors has voted not to appeal in the Xanterra tax case, ending more than two years of litigation over a $2.3 million refund in property taxes in favor of the park concessionaire.
According to Deputy County Manager Jerry Flannery, a few things factored in the decision including Xanterra's consistent legal success and that litigation could go for another year with no guarantee that the Arizona Supreme Court will even hear the case. That led to the question of interest.
"It could be another year of taxpayer dollars if we lose and all indications from the lower and appellate rulings are not in favor of our position," Flannery said. "The interest clock is adding $20,000 a month."
Of the total judgement, about $1.1 million will be due in the coming tax year from Grand Canyon School District taxpayers. This represents an offset of about $800,000 in school equalization funds paid retroactively for the four refund years. Interest right now is at about $900,000, Flannery said.
The Community College tax district will have to pay back $142,000 plus $71,000 in interest and the County Library District will have to refund $47,000, with $23,000 interest.
While the county can spread the obligation among all taxpayers for the college and library debts, the Grand Canyon School District's obligation must come from taxpayers within the district. It's estimated that it would take an increase of $6.64 per $100 valuation to cover the obligation, adding about $1,700 to a homeowner's tax bill and about $20,000 for each commercial property.
"There are not a lot of property owners (in Tusayan)," Flannery said. "The Board of Supervisors is very concerned with the impact."
Local and county officials have talked about the possibility of help from the state or federal legislature, either in the form of a grant to pay off some or all of the obligation or in legislation that would allow the obligation to be paid back over more than one tax year as the law currently mandates.
Without such relief, the whole obligation would be due in the 2007 tax year.
"We're looking at a number of options, but we're in uncharted territory," Flannery said. "We've identified some options but they're not fully baked."
In 2003, Xanterra filed a lawsuit seeking relief from local property taxes, arguing that they didn't own the buildings they occupy.
The concessionaire based its claims on similar successful suits filed in LaPaz County by the Havasu Springs Resort Co. in 1999 and in Coconino County by Aramark Sports and Recreation in 2001.
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