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Thursday, May 22, 2008

Who is Kidding Whom on Property Taxes?

Today's Standard Examiner article stating that Utah’s property tax system is “well run” is self serving for many of the political leaders in our fair state and is disingenuous and misleading.

It may be that our property tax system in Utah looks pretty good to outsiders, but a close examination of the details of our property tax system indicates it is favorable to some and unfavorable for many others, such as the elderly, on a scale that is clearly not understood by most taxpayers.

Some facts you should know:

1. In Utah, about 55% or more of your property tax funds education. This can be unfair to many taxpayers because large families do not now pay their fair share when they have several children in our public school system. The property tax rate is based on the home assessment, and does not account for the financial burden large families place on the education system. Two neighbors with similar homes may pay a similar property tax, though one may have no children in school and the other may have many children in the school system. With a 55% tax share, if we are going to reform the property tax system, the funding of education must be the logical starting point.

One solution is to remove the education funding from property taxes and replace it with funding from sales tax in Utah. Using the sales tax, everyone who spends money in Utah shares the education funding on an equal basis and property taxes would be reduced by 55%. People with large families will then pay their fair share as they buy the normal taxable items for their growing families over the years. Safeguards can be put in place by the legislature to handle any downturn in sales tax revenue for a specific year. This change would not impact the County taxes that fund County services.

2. It also appears that less than timely assessments throughout Utah add to the woes of the property taxpayers. Property should be assessed yearly to keep pace with the changing value of our homes and properties. It seems that only when property increases in value does the reassessment come forward. If the property taxes rose and fell in concert with the market value every year, taxpayers would better understand and accept these changes. For example, in Ogden Valley home values dropped 17-23% this past year, yet the tax assessment was based on the value two years ago by the assessor’s office. If any home in question was reassessed yearly the taxes would be almost $900 - $1100 less this year.

What we must address with our state political leadership is that the counties and State do not wish to reassess your property if the value has decreased because it lowers their tax revenue stream. With a little effort in the computer age and using computer models, they should be able to reassess each property yearly based on current market value.

We attended a meeting in Huntsville that Gage Froerer called (to his credit) looking for input on ideas to improve the property tax system in the state. During the meeting one man said he attended a meeting of State County Assessors earlier in the year, and assessors from areas near Salt Lake and Provo admitted that some properties have not been reassessed since the 1980s. This kind of lazy, selective assessment work leads to other state taxpayers picking up this tax slack. When these same properties are finally reassessed, the taxes could double, triple, or worse in a single year.

Our investigation of the assessor’s office in Weber County last year clearly revealed two specific problems:

1. Property owners that may owe delinquent taxes on property are still issued petitions by the Planning Department to develop or build even though their property taxes are unpaid, sometimes for multiple years.

This was brought to the Weber County Commissioner’s attention last year and as of yet, only minor changes regarding subdivisions are being considered by the County. All delinquent property taxes should be paid before ANY petition or permit is granted by the County for that property.

2. The other problem relates to the 45% property tax exemption for Utah residents on their primary residence. It is a fact that many multiple property owners use a Post Office box for the mailing address on their additional properties. Some falsely claim and receive the 45% exemption illegally on those additional properties. This problem may not be unique to Weber County.

These problems in the County Assessors office affect cash flow to the County and place the burden on the other taxpayers to carry the tax load of these tax scofflaws because the County Assessor or County Commission refuses to close these loopholes when they could be resolved with some simple diligence by the Assessors office.

These are important points since, at the taxpayer’s meeting last year at the Jr. High School in Eden, the deputy County Assessor stated that the largest problem for Weber County is the uncollected and delinquent property taxes!

We suggest that you contact your State Representative Gage Froerer and State Senator Allan Christensen along with our Weber County Commissioners. Their contact numbers and e-mail addresses can be found at the VCRD Web site Resources)

We need active citizen involvement on these issues now, the property tax system and it’s flaws will not be changed if our leaders believe our system is “Well Run”.

Larry and Sharon Zini


Anonymous said...

I called Gage a month ago about property taxes and he says the state has nothing to do with county taxes. I asked him about the meeting he held and he said it was just to get people together since he said he is paying higher taxes also. My property taxes went up $2724 last year and when I got comps to give to the county the comps were very close to my value. So I was hosed. I will check again in June when to tax assessment comes out again.

Anonymous said...

I work for a local county assessor office and I have to say that this post is absolutely correct in all of its policy prescriptions. Thank you for putting together these suggestions. We should all be lobbying our state and local officials for policy changes such as these.

There was one point I wanted to criticize:

"What we must address with our state political leadership is that the counties and State do not wish to reassess your property if the value has decreased because it lowers their tax revenue stream...."

Declining home values do not lower tax revenue streams. If values go down the county auditor simply increases each districts tax levy to compensate for the decrease in taxable value. The county assessor who isn't reappraising his/her county every year isn't doing it because the county is afraid of losing money but because they either don't have the staff or technology yet to allow that to happen.

Thank you again for this excellent and informative post.

Anonymous said...

Hang 'em all! Assessors, Legislators, every damn one of them!

Ron Gleason said...

The front page of the Standard Examiner today 5/23 has an article on residenbtial real estate in UT. The information box on the right hand side states that Ogden-Clearfield (includes all of Weber, Davis and Morgan counties) had a 6.6% appreciation for the first quarter of 2008. I am sure we expect an increase in this years real estate taxes.

Anonymous said...

To clarify the County tax rate if possible, the Weber County tax mill rate actually went down last year. The County had a 36 million dollar surplus and should hire more Assessors if needed. It would make sense to spend that surplus money to improve the County records and tax collections. It is a pretty feeble excuse to say that they don't have enough people to the taxpayers when some of their taxes have doubled, tripled or worse in the last few years. The issue to address on property taxes is education funding. Even if you could reduce the education bite from 55% to 30%, wouldn't we all like to see a 25% reduction in our property taxes?

Everyone should pay their fair share of property taxes and that can be done with a sales tax.