Many Utah County residents took to social media to express frustration when they received a postcard this week notifying them that a portion of their property taxes could double next year, something that was proposed during a Utah County Commission 2020 budget discussion earlier this month.
The proposal, if passed, would increase tax revenue for the county’s general fund, which makes up 6.8% of the county’s total property tax distribution, by $28.6 million.
As of the Oct. 8 discussion, the county’s 2020 baseline budget is out of balance by $10.5 million, not including capital expenditures.
Revenues from the general levy fund public safety and welfare, as well as government services and the justice system. The majority of property tax revenues, over 70%, fund the county’s school districts and would not be increased by this proposal.
Additional funds to address “critical deficiencies in essential services” were requested from various county departments, including $3.5 million from the Utah County Sheriff’s Office, $3 million from the Department of Drug and Alcohol Prevention and Treatment and $2 million from the Utah County Attorney’s Office.
The commission voted last year against increasing property taxes and instead opted to dip into county reserves.
But a true structurally-balanced budget, according to the Government Finance Officers Association, “is one that supports financial sustainability for multiple years into the future” instead of relying on reserve funds.
Here’s an example of how the property taxes in Utah County work: If a house is valued at $334,000, 55% percent of this value is taxed after accounting for homeowner tax exemptions. The Utah County general levy gets 6.8% percent of the $1,989 total property tax, which comes out to $123.45 in revenue annually.
This number would double under the commission’s proposal, meaning the homeowner in this scenario would receive an annual bill of $246.90.
Residents expressed frustration on social media over the proposed 100% increase which, to many, came as a surprise that lacked community input.
“Our personal budgets are getting completely blown,” wrote a member of the Facebook group Provo Forward. “How in the world do they think the citizens can keep up with this?”
“Getting expensive to live in Provo,” wrote another group member.
Josh Daniels of the clerk/auditor’s office noted in the Oct. 8 meeting that Utah County currently has the lowest general fund property tax rate of any urban county along the Wasatch Front. Even if the general fund tax doubled, as proposed, the Utah County rate would still be lower than those of Salt Lake, Weber and Davis counties.
Property taxes paid by Utah County residents have not kept up with inflation, according to Daniels. In 1998, a traditional single-family homeowner in Provo paid about $74 in property taxes to the general fund. Today, they pay about $96 which, after adjusting for inflation, is a 30% decrease.
When a home’s property value assessment increases, the property tax rate automatically decreases so that the owner pays the same nominal amount they did the previous year, which is why Utah County residents have not seen their rates increase.
Commissioners Bill Lee and Commissioner Tanner Ainge sparred over how the county should reconcile increasing expenditures and revenue shortages.
“I’m not seeing any other path,” Ainge said in support of the property tax increase. Ainge continued to say that “cuts alone are not going to fund” the 2020 budget, adding that between $10 million and $12 million in cuts would be needed.
“Well I have a completely different take on it,” Lee said.
He continued to see that he didn’t “really have an appetite for balancing the county budget on the backs of the taxpayers” without first looking for programs to cut, holding departments accountable for expenditures and verifying the clerk/auditor’s projection numbers.
Ainge rebutted that Lee was being “purely political” and “ignoring math and … basic economic principles.”
“Before we even set a (property tax increase) number, you said you were against it,” said Ainge. “What I want to see (from Lee) is a good-faith effort to actually balance our budget … and so far I have not seen that.”
Commissioner Nathan Ivie expressed support for a property tax increase and called it essential for keeping up with the county’s rapid growth. It is a difficult decision, Ivie said, but one that he feels “is very fiscally responsible and, in the long-term, in the best interest of the citizens of this county.”
Ainge, who joined the commission in January, said the county cannot continue “kicking the can down the road” when it comes to balancing the budget.
“You’ve had five years to address budget issues in Utah County,” Ainge said to Lee. “I don’t know what you’re waiting for.”
A public hearing to discuss the proposed property tax increase will be held on at 6 p.m. Dec. 11 at the Utah County Administration Building.