Oro Valley's perceived higher cost of doing businessIn the October study session on new taxes, Vice Mayor Melanie Barrett asked why Oro Valley is perceived as a more expensive place to do business than neighboring communities, especially since the proposed taxes would only align the Town with what nearby municipalities already charge.
Is caused by several factor
Finance Director David Gephart said several factors, not higher tax rates, drive the perception. He said that Oro Valley’s property values are higher than surrounding areas. So, given the same Pima County tax rate, Oro Valley Property tax bills are larger in dollar terms. In addition, he noted, commercial rents and construction costs also tend to be higher, reflecting limited available land and strong demand for quality space.
We checked the one factor we could independently verify: Net assessed property values. That is the taxable value of property after applying the assessment ratio and any applicable exemptions. It is the portion of a property’s market (or “full cash”) value that is taxed.
We found that Gephart is right
In 2025, Oro Valley’s commercial parcels (tax class 01) have the highest average value per parcel in Pima County, with Marana a close second. [see panel right]
The same pattern holds for residential parcels (tax class 03). The average 2025 assessed value of the Town’s roughly15,921 residential parcels is also the highest among jurisdictions in the county. [See panel below, left]. The same is also true of Oro Valley's commercial residential properties (tax class 04).
In other words, Oro Valley real estate is simply valued by the county as being the most expensive in the county, regardless of what is the land use.
State rules guide the valuation methodology while local demand drives Oro Valley’s higher values
Property values in Pima County are determined under state-mandated methods that the County Assessor applies locally. The Assessor uses recent sales, property characteristics, and market data, following valuation procedures set by the Arizona Department of Revenue, to estimate fair cash value. In Oro Valley, strong demand driven by location, amenities, schools, and neighborhood desirability often results in higher market and assessed values than in most other parts of the county.
Property values in Pima County are determined under state-mandated methods that the County Assessor applies locally. The Assessor uses recent sales, property characteristics, and market data, following valuation procedures set by the Arizona Department of Revenue, to estimate fair cash value. In Oro Valley, strong demand driven by location, amenities, schools, and neighborhood desirability often results in higher market and assessed values than in most other parts of the county.
Because assessments are higher, Oro Valley property owners pay more in county property taxes even though the tax rate is the same. In short, the community’s desirability shows up in higher valuations, which helps explain the “higher cost” of doing business perception.
When the the taxes paid on all three main property types (residential property, commercial residential, and commercial) are aggregated. Oro Valley owners pay to the county $2,149 per parcel for each of the 21,972 parcels assessed. The total dollars paid ($47.2 million) equals $961 for each of the 49,156 residents. These amounts are far above thc cost per resident of the other jurisdictions.
It is indeed ironic that we have built a lovely, desirable community, one that now results in greatest county property taxes each year.
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Note: The source of assessment information is the State and County 2025 Abstract of the Assessment Roll, pages 171-173. The document was prepared by the Arizona Department of Revenue.
