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- Commissioners voiced concerns about tax exemptions with State Senator Ralph Okerlund
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\By Myrna Trauntvein
Times-News Correspondent
Juab County Commissioners have concerns about taxes—particularly sales tax exemptions and tax redemptions.
They also have concerns about a variety of topics that they hope Ralph Okerlund, Utah State Senator, 24th District, Republican, can help them resolve.
Okerlund represents the 24th Utah Senate District which is located in Juab, Piute, Sanpete, Sevier, Tooele and Wayne Counties and includes Utah House Districts 1, 21, 67, 68, 69, 70 and 73.
Okerlund, a Republican from Monroe, said he had been visiting each of the county commissions in his district to find out what is of concern on the grass roots level.
"About 30 years ago, when I was a young mayor in Monroe, Senator Cary Peterson visited all of the city councils and county commissions," said Okerlund. "That was a great help to me then and I am trying to do the same."
"We are wondering about tax exemptions," said LuWayne Walker, commissioner.
The commission would like to find a way to exempt the Ute Stampede Committee from paying the enormous sales tax required by state law.
"They are not part of the county but are an independent organization," said Chad Winn, commissioner.
Jared Eldridge, county attorney, said that the Stampede is organized under a 501C3 which does not exempt them from the sales tax requirement.
"Let's fix it," said Okerlund.
Pat Ingram, county clerk/auditor, said she had a great concern with HB 23 "Certified Tax Rate Amendments" (2009).
"Our tax rates are lower," said Ingram. "We will start out at $45,000 less because we cannot use those redemptions. Our base will go lower. What is the reason?"
"In fact, if we wanted to collect the same amount next year, we would have to hold a truth in taxation hearing," she said.
That was not the intent of the bill, said Okerlund.
"This is one that slipped through the cracks, I suspect," he said.
The bill Included property tax redemptions (payment of delinquent property taxes) in the Certified Tax Rate process. For the redemption recovery only, the legislation exempts taxing entities from "Truth in Taxation" for the first year of implementation.
"That is this year, 2010," said Ingram.
What is the current Certified Tax Rate (CTR) process? (The Truth-in-Taxation free rate) is the Previous Year's Budgeted Revenue PYBR) Current Year's Adjusted Taxable Value--less new growth=Certified Tax Rate (CTR).
Under current law, the determination of the PYBR incorporates a five-year collection rate component. The new process requires (H.B. 23) that a similar five-year redemption adjustment also be part of the PYBR determination.
The redemption adjustment will be a rolling adjustment based on actual redemption collections. For the first year, 2010, the redemption adjustment will not be subject to truth in taxation.
Beginning this year the property tax budgeted amount or the amount used to determine the certified tax rate (CTR) will be adjusted downward by the five-year property tax redemption amount determined for each tax entity. The certified tax rate will then float upward by the needed percentage to make the impact revenue neutral without going through truth-in-taxation in the initial year.
"It affects every entity. UAC (Utah League of Counties) talked about it. I don't understand the reason for this," said Ingram.
"If the values go up, the rates go down. If the values go down, the rates go up," she said. "This puts us in a bad position."
The five-year redemption component is now part of the certified tax rate process. The PYBR--Five-Year Redemption Adjustment Current Year's Adjusted Taxable Value--less new growth=CTR (Rate floats up to maintain revenue
neutrality).
After 2010, there will be essentially the same process as 2010. As long as the five-year redemption adjustment is equal to or more than actual redemption amount for the prior year the CTR is not impacted and there is no need for Truth-in-Taxation.
However, if actual redemptions in a given year are more than the five-year average, Truth-in-Taxation is required to keep revenue over the five-year average.
HB 23 has no impact on how redemptions are paid, collected or used.
"We do not plan to raise taxes," said Val Jones, commission chairman. "The law will lower our base every year."
Okerlund said he would get to work on behalf of the county and would find out what should be done to remedy the problem.
There is not a lot of CIB money currently, said Okerlund. However, that does not mean that a project could not be accepted by that board. There are also not a lot of applicants for the funds.
Under the Build American Bonds program, he said, private banks can come in and buy down interest.
Commissioners would like to build a gas line to the industrial zone where Kuhnis have their animal rendering facility. It is a hardship for the business to pay for the needed fuel to be hauled to the plant.
However, the line would not be built just to facilitate Kuhnis but would provide the resource for other businesses who might like to locate in the county industrial park, said Jones.
"We are looking for a good inexpensive way to get gas out to the industrial park," he said.
"On the state level, we are looking at another tight budget year," said Okerlund.
He said one of the issues to be considered would be reinstating the sales tax on food.
"The food tax is a fair tax," said Okerlund. "It taxes everyone."
In fact, the state sales tax on food that's been incrementally decreased for the past two years will be under consideration for a complete reinstatement in the face of continuing revenue losses.
It has been projected that 2011 will see the state legislature grappling with a state budget shortfall currently being estimated at $700 million. |
