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Friday, February 06, 2009

The Rip Off of the Average Utah Taxpayer

If you have been following the Ogden Valley Forum posts on delinquent property taxes, you should be aware of the long term misuse of the property tax collection system in Weber County and other Utah counties.

Simply stated, the current property tax collection process used by Weber County and other Utah counties, has provided a tax loophole for some business and developer property owners who choose to use it to avoid paying their yearly property taxes for up to almost 5 years before sale or foreclosure. During this time period of non payment, they are assessed only a 2% penalty and about 6.5% interest. In effect, this a low cost loan courtesy of the County and State (which really means the rest of the taxpayers).

We, the other taxpayers meanwhile provide the money for the State and County services when we pay our property taxes on time every year.

We have contacted our Weber County Commissioners and after much hand wringing on their part, they have investigated and determined there is currently about $14 million in delinquent and uncollected property taxes in Weber County.

In our discussions and correspondence with the Weber County officials and the Utah State Tax Commission, we have received some vague answers on why this tax loophole exists and varied opinions on whether it is a good thing for Utah taxpayers or not.

We feel the best way to address this issue and in order to clear up the confusion and any inaccurate information, would be to list the questions we are most frequently asked and the answers to those questions.

1. Q: State Representative Gage Froerer is proposing a bill in the State Legislature (HB 418) that may increase the delinquent tax penalty (from 2% to 10%) and interest (from 6.5% to 18%) on delinquent taxes. What would that accomplish?

A: The bill will increase significantly the amount of paid taxes into the County and State coffers as of November 30th of each tax year. This will provide more cash flow for services, education and all property tax funded government applications. Most individuals and corporations that use the current system to defer paying their yearly property taxes will quickly realize it will be very difficult to earn a larger return with other investments. These suggested increases are high but lower rates would encourage the same behavior by delinquent taxpayers in the future when other available investments for their money improved.

2. Q: If they raise the penalties and interest, who will be affected, and what about those small property owners that may be struggling with their property taxes?

A: Any increase in the penalty and interest rate will affect ONLY THE DELINQUENT TAXPAYERS! It will not add to current property taxes, and in the long term, the additional funds collected may reduce your taxes or delay the timeframe for future property tax increases.

For those property owners that appeal their tax bills for various reasons, Weber County and most counties have a Tax Review Committee to consider the appeals, grant extensions, and/or waiver requests on property taxes. This Committee functions in Weber County today and should continue to provide the taxpayers an opportunity to be heard on tax related issues on a case by case basis.

3. Q: I have been told that the current collection law has worked well for the counties, State, and the taxpayers, so why change it?

A: With the astounding amount of uncollected and delinquent money involved statewide (in excess of $100 million) and in Weber County ($14 million), during a time when sales tax revenue is down, cutbacks and layoffs are increasing every day within the counties and State, it is not difficult to conclude that any additional significant revenue would be helpful to all government agencies.

4. Q: Can the Utah County governments also enhance their tax collection methods to help reduce the amount of the delinquent and uncollected taxes within their County?

A: Weber County could require the Assessor's office to review the tax records to identify taxpayers that may be illegally claiming the residential tax exemption on more than one property. Weber County could also expand the subdivision ordinance regarding delinquent taxes to deny any further county assistance to a property owner that owes delinquent taxes on ANY parcel of land in Weber County.

It may be helpful to ask our elected leaders: If the current loophole in the law is really a good deal for the taxpayer and governments as some would have us believe, why haven’t our State and County leaders told EVERYONE to use this tax loophole and defer their property tax payments on November 30th each year instead paying on time?

We should be demanding answers from our County and State leaders on this delinquent tax issue. It is daunting to think of how long this collection procedure has provided this tax loophole for the deliberate delinquent taxpayers, and how much has it has cost the other Utah taxpayers over the years?

In addition, any tax collection system that provides a tax advantage for large property owners and businesses to defer property taxes for almost 5 years while most of the other taxpayers are expected to pay their taxes on time is arbitrary and unacceptable.

The final question may be, what are our elected officials going to do about this inequitable property tax collection law? Our County leaders claim this must be solved at the State level, but we feel our County Commissioners can also assist with additional tax collection methods within the County. The County leadership should also be the most prominent voices in Salt Lake urging the legislature and Governor to take immediate remedial action on this issue by increasing the penalty and interest on delinquent property taxes.

We urge you to contact your state and county representatives to right this obvious wrong. We do have the support of the Utah
Taxpayers Association on this issue.

Larry and Sharon Zini


Pistole said...

I get it! The penalty and interest increases are pretty steep, but if you do anything less, the chronic delinquent taxpayers will go outside again with their money as soon as other investments improve. We will be right back in the same situation.

The Gipper said...

If I understand this information properly, and we don't change the law to restrict this loophole, we the taxpayers that pay our taxes on time, will continue to subsidize the delinquent taxpayers all over Utah.

Where have our elected leaders been? This is an obvious tax loophole that supports the favorite charity of the County and State lawmakers, the Real Estate/developer group.

Wake up taxpayers, you are being duped by your elected officials.

Machman said...

What you do not tell us is this. The HB 246 is a Bill which Representative Froerer is sponsoring which is a combined Bill with his annual and continually failed Bill to increase the size of residential claimed and tax exempted properties to five acres if County ordinance require increased lot sizes (as does Weber Co.). And in the same Bill, which has not and will not pass rather obviously BECAUSE of this increase property tax exemption, Representative Froerer also INCLUDES the increase in delinquent tax penalty from 2 to 20% to put a stop to Realtor/Developer advantaged low interest loans.

For the life of me, I can not understand why some folks just don't get it. Froerer is a Realtor/Developer with a large spread in the County. He is against anything his backers tell him he should be against. This latest effort is just more of the same from last session. He pretends to be for what we want and need but is being told how to evade it. Whether acquistion value or purchase price based assessments or now delinquent tax collections incentives.

If not why doesn't Representative Froerer simply put the Delinquent Property Tax Bill as a "stand alone Bill" without tying it to something he must know, surely by now after what -- three years of failure, will never pass? Can anyone see a big Red Herring here?

And as for the minimum 3 acre property tax solution...why in the world can't folks understand this is not a Statewide problem, hence a reason given for it not passing multiple times. It is a Weber County - Ogden Valley specific problem, created by Weber County and the ordinances passed by the three Commissioners. The solution is at the Weber County Building, with the three Commissioners and the Weber County Assessors, and NOT with a State wide statute.

If we want to fix a problem, simply go to the source of the problem. And it is NOT the Utah legislature. The State laws were there BEFORE Weber County created its own problem for Ogden Valley.

This latest misdirection simply can not be innocent nor unintended.

Fix the bloody problem! And do not play games Representative Froerer. We are watching and waiting for results, not this BS you have cobbled together in HB 246.

Strip out the Delinquent Property Tax provisions and let your good deal developer buddies and financial backers who put you in office, identify themselves clearly on the issues Larry And Sharon have raised. They are significant and adversely effect most of your constituents.

I have identified the problem(s), suggested solutions, so please do not come at me with these mindless quotes about "not doing anything". And "Thank you" Larry and Sharon for driving this important loop hole to the forefront for us all to see.

Machman said...

Ooops typeo, should be "from 2 to 10% not 2 to 20% in previous post.

Sorry bout that but "authur"itus and cold fingers, bad eyesight, dirty glasses... ya know....

Larry Zini said...

Machman and all:

Our apology. The new delinquent tax bill to be introduced by Rep. Froerer does not have a number assigned to it as of yet. We have corrected the posting.

It will be a stand alone bill.

Thanks for your input.

Sharon and Larry

Machman said...

Thanks again Sharon and Larry,

But the point remains, HB246, does indeed contain the increased 10% penalty for delinquent property taxes, which is apparently predicated upon passage of another Bill, which so far has not even been introduced yet. Why would anyone put the passage of a 500% increase in delinquent property tax penalty, which has not even been numbered or introduced yet, into a Bill they seriously wanted to be passed? ...Seems to be something about "putting the cart before the horse" assure the load won't move eh?

I also ask this question. Why is Froerer the only person being taken to task, as it were? The Weber County ordinance requirement of 3 acres minimum is a Weber County Commission induced property tax problem.

Senator Allen Christensen (R) Dist. 19 - Morgan, Summit, WEBER Counties, Senator Jon J. Greiner (R) Dist 18 - Davis, WEBER Counties, Senator Scott Jenkins (R) Dist 20 - WEBER county, Representative D. Gregg Buxton (R) Dist.12, WEBER COUNTY, Rep Brad L. Dee (R), Dist 11 - WEBER County, whoever took Rep Glenn Donnelson's seat (R) Dist 7. - WEBER County, Rep. Kerry W. Gibson (R) Dist 6, Western WEBER County, Rep. Neil A. Hansen (D) Dist 9, - WEBER county, Rep. LaWAnna Shurtliff (D) Dist 10 - WEBER County.

Let's see, that is three (3) Senators, and seven (7)Representatives, or a total of ten (10) legislators who own our WEBER county problem. Sure I can hear them doing the double back craw-dad shuffle...saying; well it is really Gage's problem since Ogden Valley is in his District. But is that real? Do we let them off the political hook that easily? I think not. Senators
from and Representives of Weber County own Weber County-wide problems. And not just the specific ones within their political District boundaries.

It seems to me, if there were any "leadership" at all in these our legislators, one would rise to pull them together. They all (ten) would would meet with the three (3) commissioners for Weber County and fix the property tax over burden situation on those caught up in the Weber County Commissioner's created property tax problem.

That is if there were any leadership involved with our Senators and Representatives. Again, the solution to a Weber County created problem is not at the State level where a Representative goes begging for the rest of the State's residents to bail us out.

If you were a legislator and some fool came along asking that you vote for a bill which would increase or shift property tax burdens upon your constituents to bailout his own, because of a local / county ordinance, would you vote for it?

Doubt it.

The Viking said...

In the frustrating world of fighting the system, seldom does such a clear cut choice present itself. There are no hidden agendas here, the current property tax collection procedure is wrong and it provides a clear advantage to the large landowners and businesses at the expense of the average taxpayer.

If the people ever had a chance to stand up and write your political leaders to force a change for good, now is the time.

Don't be bashful, contact everyone you know in Utah and tell them to write their state and county elected representatives to support reform legislation on this issue.

Larry Zini said...


HB246, the Residential Exemption bill as you know has two parts. The first is an effort to give the 45% primary residential exemption to the entire residential property (up to 5 acres) if a city or county zoning ordinance has set that amount of land as the minimum required to build a home. We have received numerous complaints from residents caught up in this situation. Any change to the residential exemption law must be done at the State level, not the county or city.

The second part of the bill is addressing any property that has falsely claimed the residential exemption. A 10% penalty, as noted in the bill, would apply if the exemption is falsely claimed, regardless of the size of the property. In that portion of the bill anyone found falsely claiming the residential exemption would not only have to pay the full taxes due but a 10% penalty as well.

Even though this bill is similar to the one proposed (but not passed) last year we believe it is a worthwhile effort.

Sharon and Larry

Just makes sense said...

If you were a legislator and some fool came along asking that you vote for a bill which would increase or shift property tax burdens upon your constituents to bailout his own, because of a local / county ordinance, would you vote for it?

Doubt it.

Anonymous said...

Once someone has purchased a parcel of land, and has sole title to the same, there should be no more fees associated with owning the land.


There are other ways to pay for county and city services, other than make a person continually pay for the land over and over; that suggests that the land is not really theirs, but is instead only held against its eventual seizure and disposal in a tax lien sale.

Which is wrong.

Of course, until that is the case, taxes should be collected fairly.

RudiZink said...

I have a simple suggestion, "The Gipper." From here on out, I'd suggest that we immediately quit referring to our elected officials as out "leaders."

Let's henceforth call them what they are: "elected public servants," which better describes the representative/agency relationship.

Zipper said...

Well Rudi, that may be hard to do since they treat us more like servants. These "elected public servants" need to put their constituents welfare first and provide oversight on policies that create unfair law applications that benefit only the wealthy.

Anonymous said...

Nice how the Standard Examiner just basically alwasy says "Hey, the system ain't broke. It might just need a little tweek here and there, but Hey! We like things just the way they are."

So tax scofflaws will continue to avade paying taxes until they can peddle them off on some unsuspecting California crazy or out of State gentile. And the millions in uncollected and delinquent taxes will just ride along independently for up to five years with the County floating a loan.

And the Standard Examiner will not even touch the real issue, of large landowners and developers who are paying literally pennies an acre on land worth hundreds of millions, but "taxably assessed" at eight (8) cents an acre due to fradulent claims of FAA or Farmbelt or commonly known as "Greenbelt" property.

Why? Because they (the news print media) are linked by enormous payoffs in the form of all those five and ten page color ads from the Realtor Association.

In the trade, I'm told those Real Estate Offices with hotties are known as "Body Shops" by the way.

But hey, we need to keep on electing all these good fine Utah natives, home grown and home educated "wonderful leaders", glib and meek with humble fantacy voices, they must truly be see'ers and have magical powers of divine inspiration.

The Viking said...

If you read the Standard Examiner article about the delinquent taxes, you will note that all the Weber County employees are making excuses why these taxes should not be collected. Mr. Bond and Ms. Hurtado are classic do nothing to crack down on the builder/developer cartel in this area. Hurtado is very good at making excuses for wide open development.

Of course, any action that may require real work on the part of the County staff is to be avoided at all costs. Just a simple change in attitude about tax collections could put an end to this madness.

Give them a chance to collect delinquent tax money, they will turn their backs. However, they will squeeze more out of the regular tax payer that pays on time.