By Myrna Trauntvein
Times-News Correspondent
Though it was earlier than expected, the certified tax rate is now available for taxing entities. One complaint that has come from cities statewide is that municipal budgets must be adopted no later than June 22 and must then be submitted to the Utah State Tax Commission. “Usually we set the budget and receive the certified tax rate later,” said Seth Atkinson, city administrator. There are two types of tax rates: (1) entity and (2) area. A group of entity rates make up the area rate. The area rate becomes the final tax rate charged by counties against the assessed value of a specific property. Just as households spend money on various budget items, taxing entities frequently have more than one budget. Tax rate increases have legal disclosure requirements called “truth-in-taxation.” “Cities and counties have been pleading for a change in the way the certified rate is set,” said Atkinson. The maximum tax rate allowed by state law is .007, he said. The tax rate for the 2019 fiscal year budget is 0.001196 which is expected to yield revenue of $328,114, he said. Each year each county in Utah calculates a new certified tax rate for all taxing entities (i.e. cities, school districts, and service districts) within their jurisdiction by taking the property tax revenue collected the previous year and dividing it by the current assessed property value within the taxing entities (exclusive of new growth). “This is the tax rate that is then applied to all assessed property (including growth) and the new total becomes the base for next year,” he said. Another way to say this is if the home value doubles then the tax rate will be reduced by half. “While your property may increase or decrease in value, the actual dollar amount you pay from one year to the next should be roughly the same unless a tax increase or decrease is passed by any taxing entity (e.g. school district, county, city). The city’s revenue from property tax only increases when there is growth. Note, growth not only brings revenue but it also adds to costs (more cars on the road, more service requirements, more infrastructure). There is no adjustment for inflation so over time the buying power of property tax revenue declines. At some point in the future any city will need to raise taxes or cut services. “There is a flaw in the system,” said Atkinson. Council members agreed to adopt the suggested certified tax rate.
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