Before complaining about property tax, know who’s taxing you and why

 

By Suzanne Dean

  12-19-2019

 

When a property tax increase is advertised, there are two reactions.

One, reflected in people who characteristically show up for the public hearing is, “I can’t afford higher taxes.”

The other, reflected I believe, in the overwhelming majority who don’t show up at the hearing is, “You can’t fight city hall. They’re going to enact it no matter what I say. And maybe costs are going up. Maybe they need it.”

If I may say so, both of those response are a little simplistic. Based on comments I hear in meetings, I think many taxpayers don’t understand who is taxing them, and how much each taxing unit is charging.

For starters, I’m afraid some people assume that since their tax bill comes from the county, and since they write their check to the county, the county gets all their property taxes. That’s way wrong.

Yes, counties assess property, figure out tax bills, send out the bills and collect the taxes. But they remit the lion’s share of what the collect to other state and local entities.

I’m going to use my own property tax bill as an example. I own a town home in Ephraim that is appraised at just $118,700. My total tax bill is $1,021.81.

The biggest item on my bill is education. I pay about $520 to the South Sanpete School District, $108 in a “basic school levy” that goes to the Utah Office of Education (USOE) for all schools in the state, and $1.31 that goes to the USOE for charter schools statewide. That adds up to $629, or nearly 62 percent of my total bill.

A couple of comments on school taxes: First, Utah has a lot of kids, and we all realize we have to shell out for education. Every governor and every Legislature since Calvin Rampton, who was governor in the late 1960s and early 1970s, has said education is the state’s top priority.

Second, when county raises taxes, people typically show up in droves to complain. When the school board raises taxes, there are typically three or four to a dozen citizens max at the hearing. Yet school taxes are close to triple county taxes.

The next largest item on my tax bill is, in fact, Sanpete County. Last year, I paid $195 for county government, plus two “A&C” (assessment and collection charges) of just under $28 that ended up in the hands of the county. Those three items come to $223, or 22 percent of my tax bill.

With the tax increase passed Tuesday, the “county” portion of my bill for next year will go up $6.75. Yep, about the cost of a hamburger and Coke at McDonald’s (depending on the hamburger).

To put county property taxes in further perspective, the 2020 Sanpete County budget projects that the county will collect $3,895,000 in property taxes. About $150,000 of that amount will come from the property tax increase. The tax increase amounts to 3.8 percent of property taxes the county expects to collect.

Notably, Sanpete County brings in money from a host of sources, such as sales tax, grants, charges for things like marriage licenses and passports, traffic fines and interest on savings. The 2020 budget actually shows more than 70 different revenue sources.

Property taxes are expected to cover about 24 percent of the county’s $16.2 million budget for 2020. The other 76 percent comes from those 70 revenue lines in the budget. The $150,000 tax increase commissioners just passed amounts to just under 1 percent of the total budget.

In asking whether the tax increase is justified, you might ask yourself if your personal cost of living has gone up 1 percent in the past year? Mine has. In fact, the Social Security Administration just told me my cost of living is up 1.6 percent and increased my social security check accordingly.

The third largest item on my property tax bill last year was the municipality where I live, in my case Ephraim City. I paid $121.05 to the city, which is about equal to one month’s city utility bill.

Based on the Ephraim’s FY2020 budget, the city expects to bring in about $270,000 in property tax. But its general fund revenues and expenditures are $5.1 million.

Mind you, that $5.1 million doesn’t include any utility revenue. Nor does it include savings and grants flowing into eight capital or special-projects funds. The city’s grand total revenues and budgeted expenditures are $16 million, just a shade under the county budget.

And what role does property tax pay in keeping an operation of the complexity of Ephraim City going? It’s a pittance. Property tax is 5 percent of general fund revenues and 1.6 percent of total revenues.

The final two items on my tax bill are two operations dedicated to developing water resources and infrastructure. The Sanpete County Water Conservancy District and Central Utah Water Conservancy District account for $47.56, or about 4 percent of my property tax bill.

There are 756 dams and 10,000 miles of large water transmission lines in Utah. These two water conservancy districts are responsible for parts of that network. In the case of Sanpete County, the districts are primarily involved with irrigation water. Our towns get most of their culinary water from nearby mountains or wells.

In the 19 years I’ve been covering the county, I don’t remember the Sanpete Water Conservancy District ever advertising for a tax increase. But we have run a public notice every year about the district’s budget hearing.

Our newspaper hasn’t covered the budget or hearings. We need to do better. But I would be surprised if anybody who isn’t on the board has showed up for most of those hearings.

The Central Utah Water Conservancy District has sought at least four tax increases since 2005, including one this year. The Messenger has written about some of the increases. But again, we haven’t reported in sufficient depth what the district does and what its budget goes for.

So that’s the story. Your school districts, county government and larger town governments are equivalent to medium-size corporations. They have complex budgets where the lines of figures take a dozen pages. Your property taxes are a relatively small percentage of the revenues of these operations. Over the years I’ve been covering Sanpete County, these governments have been remarkably conservative (often too conservative, in my opinion) in raising property taxes.