Property tax fairness
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ax revolt.
Those two words strike terror in the hearts of elected officials -- if those officials are smart enough to be afraid. The last one we saw in these parts was in Davis County in 2002, when the County Commission proposed a 138 percent increase in its portion of the property tax. Property owners came unglued. More than 1,000 people showed up at the old courthouse in Farmington to raise hell with commissioners.
In response, the 138 percent proposal was reduced to 24 percent, two of the commissioners were defeated in their next elections and the third decided not to run.
A version of that history may be repeating itself, only this time it isn't confined to Davis County. Property owners in Weber and Morgan counties are joining Davis taxpayers in a collective state of shock at soaring property valuations. Anecdotal stories of 30 percent to 70 percent jumps in assessed value are common. Property owners in Bountiful, Farmington, Morgan, the Ogden Valley and other locations throughout the Top of Utah are gasping for breath after opening their property tax notices, since their annual tax bills are shooting up from hundreds to thousands of dollars.
And while the counties are taking their share of the increased revenue, special service districts like water, mosquito abatement and the like are benefiting from the windfall, too. Suddenly, there's going to be a lot of money sloshing around in government coffers.
While few people dislike the fact that Utah's real estate market has been booming -- watching your property value mount is a uniquely pleasurable experience -- the frequent downside is that taxing entities don't lower the tax rates themselves so that your tax bill remains level. Simple growth in the market -- additional houses, businesses, etc. -- aren't enough to satiate the hunger of the government animal. Indeed, the system is designed to make tax hikes more likely.
For example, Weber County Commissioner Craig Dearden, in a public meeting in the Ogden Valley recently, blamed the connected jump in property valuations and property taxes on the fact that counties set their tax rates for the coming year in December, but valuations aren't completed and mailed to taxpayers until months later. That's convenient for counties looking to maximize revenues, but leaves property owners victims of rapidly escalating valuations.
Davis County and the Davis School District are partnering to offer $5.5 million worth of property tax rebates to about 20,000 property owners. For every $20,000 in market value that is more than the 24 percent average increase, $100 will be lopped off the property tax bill. And while that's a nice gesture, it's a one-year-only deal, and the higher taxes will kick back in next year if the rate itself isn't lowered at the end of this year.
These hikes in valuations are problematic for a couple of reasons: First, they hit people on fixed incomes and low-income property owners hardest. Furthermore, most county assessors don't reassess property values often enough to avoid the all-at-once jolts property owners get every four or five years when the county gets around to reviewing their home or land or commercial property.
If elected officials -- in the Legislature and at the county level -- hope to avoid the rumbling volcano of a full-blown tax revolt, they should begin correcting the flaws that are built into this system. Foremost on the list: They should figure out how to perform property valuations more often, and make sure those valuations coincide each year with the setting of the tax rate.
And they better hurry up if they hope to save their jobs.
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