Thursday, September 3, 2009

Candidates Respond, Part 4: Truth-in-Taxation and Certified Tax Rates

by Heber M. Thompson, James H. Hadfield

LocalCommentary.com: Utah's Truth-in-Taxation laws require the county to set the City's property tax rate (Certified Tax Rate) each year at the level that will get the City an equal number of dollars from year to year from the same properties. These calculations do not allow for inflation, so the effect is an annual decrease in revenue (in real, inflation-adjusted dollars) approximately equal to the inflation rate. That's usually only a few percent per year, but it compounds rather brutally over several years or more. Now it appears that inflation is likely to be significantly higher in coming years than it has been recently, which will only make the problem worse. Will you lobby the state legislature to index certified tax rates to inflation? Unless and until they do, would you favor an annual tax rate increase (so called), equivalent to the rate of inflation, so the City at least breaks even from year to year, instead of falling behind?

HEBER M. THOMPSON

For the last three years I've put the issue before our state representatives, and I plan to do it again this coming year. I do not favor an automatic tax increase, but one that is needed for specific, identifiable, critical costs, such as police salaries.

JAMES H. HADFIELD

Taxes are a unique item. Such a small percentage of the property tax comes back to the city. The school district takes the single largest slice. The second largest goes to the county, followed by the special taxing districts such as the Central Utah Water Project (CUP) and others. Major tax increases are not something that the city controls. We need to bring other entities into town that will offset the taxes and lobby the Legislature to build into the law the necessary steps to keep the municipalities at an equal level.

[LocalCommentary.com: For a detailed explanation the impact of Utah's Truth-in-Taxation law at the municipal level, see this article on Certified Tax Rates.]

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