This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Ogden officials say their residents will not pay any more to the city in property taxes this year compared to last. Ditto in Salt Lake County for its countywide services. Clearfield says its property tax rates will be the same as last year. And Nebo School District says its tax rates will be a bit lower than last year.
Those carefully worded claims would seem to indicate they all avoided property tax hikes. They didn't, at least according to state law.
Residents will see that on tax valuation notices starting to hit the mail. Those entities are among 53 local governments statewide proposing property tax increases, including cities, counties, school districts, water districts, cemetery districts, mosquito-abatement districts and more.
According to Utah Tax Commission data, Ogden proposes a 35.5 percent hike; Nebo a 22.1 percent boost; Salt Lake County a 5.8 percent bump; and Clearfield a 12.4 percent one.
So how can they make claims that sound as if they are avoiding increases?
"It's one of the problems with our system. Games can be played with it," said Billy Hesterman, vice president of the business-backed Utah Taxpayers Association watchdog group.
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$emantics • Ogden, for example, just retired a voter-approved general obligation bond. That normally would lower taxes as the debt disappears. But the northern Utah city proposes instead to keep taxes at previous levels to fund raises for police and firefighters.
"On a citizen's tax notice, they wouldn't notice a difference in the tax," said Ogden comptroller Lisa Stout. "We just felt it was an opportunity to fund those wage increases without adding to the tax burden of citizens over what they felt in prior years."
"That's a tax increase," Hesterman said. State law agrees. That's why Ogden must hold a Truth in Taxation hearing on the proposal in August. The city technically is proposing a hike of $106.64 on a $230,000 home, according to state data.
"The voters decided that for a certain amount of time, they would pay an extra amount in their taxes to cover a bond," Hesterman said. "That bond is now coming to an end, and to say that no one is seeing a tax increase [by keeping taxes at previous levels] is just not correct."
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Salt Lake County • Essentially the same shift is taking place in Salt Lake County. But because the county is on a calendar budget year, instead of a July 1 to June 30 fiscal year, it already went through the Truth in Taxation hearing process, and the increase of $13.92 on a $230,000 home is about to show up on tax notices.
The county also was about to retire bonds that voters approved in 1995 to finance a jail expansion. County Mayor Ben McAdams proposed to keep collecting the same amount and spend it on criminal-justice system improvements.
He and others said it would not raise taxes that residents had been paying.
"The only ones not calling it a tax increase," County Council Chairman Richard Snelgrove complained, "are in the echo chambers of this room."
Hesterman said, "What they should be saying is we want to take an opportunity to enhance our services, and we're going to do so without making it a dramatic hit on what you've already been paying — but we want you to know this is a tax increase."
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Same rates, higher tax • Clearfield is keeping the same tax rate for the fifth straight year, City Manager Adam Lenhard notes. That number, multiplied by the value of property, determines how much tax is paid.
However, state law requires local governments to adjust tax rates so they generate only the same revenue as the previous year. That may require lowering rates to prevent any windfall from the rising values of homes and property. (The law does allow some increase to cover new-construction growth.)
If governments want more revenue, it is considered a tax hike — and they must hold a Truth in Taxation hearing.
Clearfield plans to boost its revenue, so it technically is calling for a tax increase of $17.12 on a $230,000 home. Lenhard said it "represents less than one-half of 1 percent of our total budget. It's not even keeping up with inflation," and is needed to strengthen reserves and help fund street projects and rehabilitation of a public works building.
"We see this often in cities," Hesterman said about assertions of holding tax rates the same or lower. "They say the rate is staying the same, so it's not a tax increase. They are not telling the whole story."
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Lower rates, higher tax • Nebo School District in southern Utah County is proposing, according to the state, a tax hike of $139.78 on a $230,000 home.
But, "technically, our [overall] tax rate will be slightly lower than it is this year," Tracy Olsen, the district's business manager, said.
He said the state calls it a tax increase because of "an interesting dynamic of our state certified tax rate system" that requires tax rates to generate the same revenue, or face a Truth in Taxation hearing.
Excluded from that calculation, he said, are rates needed to pay off bonds. Nebo, like Ogden and Salt Lake County, will see smaller bond payments next year.
The district proposes "shifting some tax rate from one area to the other," Olsen said, resulting in what "looks like this huge tax increase." He said the shift will allow some pay-as-you-go financing for projects, instead of borrowing.
Shifts are also proposed in neighboring Juab School District. Business administrator Darin Clark said his district's overall combined tax rates are dropping because of lower debt, but it is increasing overall revenue by $407,000. So it is listed as technically increasing taxes by $107.02 on a $230,000 home.
"We really need to be involved as citizens so we know the whole story," Hesterman said, "and make sure we're holding these elected officials accountable so we get the whole picture of what's happening."
He said upcoming Truth in Taxation hearings allow such participation, and schedules are included in mailed tax notices. Hesterman noted that grass-roots pressure in those meetings often prompts officials to reduce or erase proposed tax increases.
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Biggest bumps • State data show that 53 local governments are proposing property tax increases this year, compared to 35 last year. In 2014, 37 raised taxes, and in 2013, 42.
Places with the biggest proposed hikes by dollar amount (for an average $230,000 home) include: Elk Ridge, $292.22; Sevier County, $211.76; Nebo School District, $139.78; the Cedarview-Montwell Special Service District (in Duchesne County), $114.23; Juab School District, $107.02; Ogden, $106.64; Roy, $98.29; Paragonah, $98.04; Provo School District, $89.94; and Midvale, $75.39.
By percentage, the biggest tax hikes are in Cedarview-Montwell Special Service District, 136.2 percent; Richmond Cemetery Maintenance District, 133.9 percent; Elk Ridge, 106 percent; Midvale, 104.2 percent; Paragonah, 75.8 percent; Scofield, 74.8 percent; Sevier County, 58.5 percent; Bear River Water Conservancy District, 55.9 percent; Salt Lake City Mosquito District, 51.3 percent; and Woods Cross, 46.1 percent.
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Explanations • Reasons for the proposed increases vary, but generally, officials say they are needed to maintain essential services — and often come after years of avoiding tax increases.
Hal Shelley, mayor of Elk Ridge in Utah County, home of the largest proposed increase in the state by dollar amount, doubts his city actually will raise taxes by the full amount proposed.
He said the City Council proposed to more than double current taxes to show residents how much it would cost to provide the level of services that some seek, and cover maintenance and repairs the city has deferred in recent years.
"It's kind of a dream list," Shelley said, "but a practical dream list."
He noted that Elk Ridge and its 3,500 residents have no businesses in their bedroom community to generate sales taxes to help fund the city, so it must rely entirely on property taxes.
"We haven't had a tax rate increase of any significance for maybe 10 years," Shelley said, noting that means deferring needed maintenance and purchases of equipment.
"It's just a very costly proposition to try to run a little city without a source of income" besides property tax, he said.
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Midvale • City Manager Kane Loader said Midvale's hike is needed partly because its last property tax increase came in 2009.
He said the city had been using savings from joining the Unified Fire Authority and the Unified Police Department to help cover higher costs since then, but inflation has now eaten all of it.
"Last year we got through by dipping into our fund balance," he said. City Council members "wanted to get the fund balance back up to a reasonable amount. So they looked at doing a property tax increase. Even with doubling our property tax, we're generating about $1 million," not a huge amount for a smaller city.
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Paragonah • Constance Robinson, mayor of Paragonah, said her small town of 500 people in Iron County had never raised property taxes in her 24 years as mayor, but is being forced into a 76 percent increase now.
She blamed the hike on a fight with the county over its plan to bill it $46,000 a year for police protection. "We said we can't do that. We'd have to disincorporate," and the town contracted instead with neighboring Parowan for $12,000.
She said the county now threatens to withhold its property tax money unless Paragonah pays for fire protection. "So we have to do what they say because they are using the fire department as a pawn," and her town needs to raise taxes to do it.
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Post-recession effects • Roy City Manager Andy Blackburn said that, similar to many others with proposed tax hikes this year, his city raised taxes only one other time in the past 20 years.
That meant that city employees' wages were frozen during the Great Recession, and they received no raises from 2008 to 2013. "So our salaries are lagging behind other cities," Blackburn said, leading many of them to leave for better pay elsewhere.
He said the 35.5 percent tax hike proposed would fund raises and some long-delayed equipment needs.
Woods Cross City Manager Gary Uresk said his city also seeks a 46 percent tax hike to catch up on some work it deferred during the recession.
"We need to build a new city shop. It's probably 30-plus years old, and just outdated," he said. "We've been looking at this for probably 15 years. Then the recession hit. We held off. We feel that now is a good time to get started."
Biggest proposed property tax hikes, on a $230,000 home
Elk Ridge • $292.22, up 106 percent.
Sevier County • $211.76, up 58.5 percent.
Nebo School District • $139.78, up 22.1 percent.
Cedarview-Montwell Special Service District • $114.23, up 136.2 percent.
Juab School District • $107.02, up 14.6 percent.
Ogden • $106.64, up 35.5 percent.
Roy • $98.29, up 37.9 percent.
Paragonah • $98.04, up 75.8 percent.
Provo School District • $89.94, up 13.7 percent.
Midvale • $75.39, up 104.2 percent.
• See full list online at sltrib.com
Source • Salt Lake Tribune analysis of Utah Tax Commission data.