County tax increase has pulled
$4.7 million out of economy
In 2016, in the face of strong opposition from an auditorium full of Sanpete citizens, the county commissioners hiked real property taxes 60 percent. This increase went into effect in 2017.
How much money is involved? Sanpete’s 2019 financial statements, released three weeks ago, allow us to add it up. The tax hike has raised an extra $4,777,683 in three years.
What has happened to the money? Sanpete’s primary operating fund is called its “general fund.” At the end of 2016 it totaled $3,423,025. As of December 31, 2019, the fund was 2.5 times larger, at $8,221,706, an increase of $4,798,681.
The good news is that this extra tax haul has not been squandered. The bad news is that this extra tax burden has been an unnecessary anchor on Sanpete County. The $4,798,681 has been removed from our local economy, only to be placed in a government fund that sits there, earning minimal interest.
In fact, the county is in violation of legal limits on how much excess can be hoarded in the general fund. Under Utah Code §17-36-16, the general fund may not exceed 50 percent of fund revenues for the current year. According to the auditor’s compliance report, Sanpete County exceeds the legal limit by about $1,250,000.
The auditors recommended that, to comply with the law, the county either should spend the excess or move it into a fund for long-term capital improvements. Disturbingly, the county replied that it will spend the excess in next year’s budget.
Last November, after another public hearing in which many objected, the commissioners increased real property taxes another 3 percent (effective in 2020), for a cumulative increase over 2016 rates of almost 65 percent.
I hope our commissioners will realize this money should be building our economy, not sitting in a government account. I hope to see a property tax decrease back to 2016 rates.