SOUTH OGDEN — South Ogden leaders are leaving open the possibility of a property tax hike to help balance the 2021 budget.
But they have yet to take formal action and want to see how the economy evolves in the coming months before making a firm determination. “At this point there’s been no definitive answer from the elected leaders on what they intend to do,” said Matt Dixon, South Ogden’s city manager.
Whatever the case, preliminary budget estimates show sales tax revenue dipping due to the economic punch of coronavirus, from $3.78 million to $3.42 million, down about $360,000, or 9.5%. And the tentative budget for the coming fiscal year, approved by the South Ogden City Council on May 5, calls for $3.29 million in property taxes, up $229,522, or 7.5%, from $3.06 million in the current 2020 budget.
That tentative property tax increase for 2021 compares to the relatively flat 1.2% increase for 2020 over 2019, from $3.03 million to $3.06 million. The overall proposed general fund budget for fiscal year 2021, meantime, totals $17.83 million, which factors spending for police and fire protection and some of the other key city functions.
Whether the city needs more property tax revenue and, if so, how much should come into focus in the weeks to come as sales tax receipts come in from the state, clarifying the extent of the COVID-19 economic hit, Dixon said. Likewise, certified tax rates as determined by the Weber County Clerk-Auditor‘s office, to be completed by June 8, should help clarify things. The certified rates will help determine how much South Ogden and all other taxing entities in Weber County may collect in property taxes without having to hold a truth-in-taxation hearing, the mechanism spelled out in state law to boost property taxes.
North Ogden leaders are weighing a 22.3% increase in property taxes for 2021, from $1.22 million to $1.49 million, as they fine tune their 2021 spending plan. Likewise, Roger Brunker, a deputy in the clerk-auditor’s office, said he’s heard from three or four entities in the county that are mulling increases. Public health orders implemented around the country to limit movement and thus curb the spread of coronavirus have caused a dip in economic activity and a spike in joblessness, resulting in budget crunches all across the country.
The coronavirus effect notwithstanding, Dixon thinks South Ogden will manage. The tentative budget plan calls for use of around $1.5 million in surplus funds to make ends meet.
“It’s a pretty lean budget. Just kind of treading water to keep operations going,” he said. It contains funds to finish the Burch Creek Park expansion project, but no new big capital outlays.
City leaders addressed the notion of a property tax hike before approving the tentative budget on May 5, but noted that they needed more clarity on the hit the economy takes before taking definitive action. “Who knows how this is going to look a couple months down the line,” said Councilmember Brent Strate.
If South Ogden does formally seek a property tax hike, it would be subject to a truth-in-taxation hearing, which are typically held in August, before officials could officially sign off on the spending plan. South Ogden leaders had considered a property tax hike last year, but ultimately voted it down.