Of the eight taxing entities throughout Cache County seeking property tax increases this year, some have in the past made modest annual increases to keep up with inflation. Others have gone 20 or 40 years without increases — but now city leaders see a need for more revenue.
Logan City School District, Lewiston, Millville, Nibley, North Logan, Providence, Richmond and Smithfield are all seeking property tax rates above the certified rate set by the Utah State Tax Commission, which is essentially last year’s budgeted revenue divided by the current assessed property value. The certified rate guarantees taxing entities — like cities, counties and school districts — the same revenue as last year.
If taxing entities want to increase tax rates above the certified rate, however, they are required to hold Truth in Taxation hearings in August, where the public is invited to express their support or opposition to the proposed tax increases.
“That is the only place they can make a difference if they don’t want their taxes raised, is to go to the hearings,” Cache County Chief Deputy Auditor Dianna Schaeffer said. “Take all of your relatives and your neighbors and friends that don’t want to increase taxes.”
Longtime residents of Lewiston and Nibley are probably used to the Truth in Taxation process. For years, those two cities have held their tax rate. As property values increase, the certified tax rate decreases and the average property owner ends up paying less. Holding the rate means the average property owner would pay incrementally more every year and cities still have to conduct Truth in Taxation hearings as the rate is technically an increase from the certified tax rate.
“A lot of them are holding the rate,” Schaeffer said. “Because as long as values continue to climb, then they get a small amount. It doesn’t really bother me when it’s a few dollars, and it helps them keep up with inflation as they’re providing their services; I think that’s great.”
Nibley City Manager David Zook said the City Council there has had a policy for years of holding the property tax rate. As property values increase, he said, so does the cost of asphalt and building supplies, so it is necessary to bump up rates just a bit to keep up with the cost of running a city.
The average property owner in Nibley will end up seeing the same property tax bill as last year, but if a homeowner underwent significant renovations and increased their assessed value, they will see a larger property tax bill, even though the rate has stayed the same.
“That does mean that people's property tax goes up as their property value goes up, but the theory is that that helps us to keep up with inflation,” Zook said.
Lewiston Mayor Kelly Field said his city has historically kept a similar practice of holding the property tax rate. Even though the city conducts a Truth in Taxation hearing nearly every year, he said he doesn’t view it as a property tax increase.
“It prevents us from getting into a situation where a lot of these other communities get where they have to propose 100, 200 percent property tax increases because they didn’t keep their property taxes up with inflation,” Field said.
On the other end of the spectrum, some cities haven’t increased property taxes above the certified rate in decades. Richmond, for example, has kept steady since 1978.
“At first it seemed good, and it was good until now,” Richmond City Councilman Tucker Thatcher said.
Thatcher, who has served on the council for six years, said the city, the valley and the state have changed dramatically over the past 40 years, and operating costs have increased. He said he doesn’t think Richmond should go another 40 years without a boost in property tax revenue. The city is proposing a 74 percent increase over the certified rate.
Richmond Mayor Jeff Young said he would like to follow the example of Lewiston and consider a slight increase every year to hold the rate. He said he encourages his residents to attend the upcoming Truth in Taxation hearing.
“Come and be involved,” Young said. “Have the conversation. And if there’s better ideas, by all means, let’s come up with a better idea.”
Smithfield hasn’t increased its rate in seven years, according to City Manager Craig Giles, and this year accounts for the largest percent increase above the certified rate throughout the county. The city is proposing a 100 percent increase over the certified rate.
“We’re a full-service city — police and fire,” Giles said. “And those costs go up every single year, and our revenue stream hasn’t kept pace, and so it’s time, it’s warranted and it’s needed.”
Jeffrey Barnes, mayor of Smithfield, said the proposed increase will help ease some employment issues. He said salaries in Smithfield aren’t high enough to attract job applicants, and the city has lost police officers to other agencies in the valley.
“We haven’t kept up with other cities on Truth in Taxation, and that’s having an effect on us now,” Barnes said.
Down in Millville, Mayor David Hair said the city hasn’t increased rates above the certified rate in 20 years. Millville has a relatively low certified property tax rate, amounting to $77 on an average property of $255,000. The city is proposing a 24 percent increase. Hair said the city is growing fast and paying for roads around the new Ridgeline High School last year drained a lot of funding.
“I’ll just tell you this,” Hair said. “The mayor who went out said the one thing that he wished he’d done was increase taxes just a little bit.”
The property tax residents pay out to cities is generally just a fraction of their overall property tax bill. School districts assess a much higher property tax.
Logan City School District this year is proposing an 8.3 percent increase over the certified tax rate. The owner of a home valued at $227,000 would pay $958 under the certified rate, but the school district is proposing to increase that by $80, up to $1,038.
In a story in The Herald Journal earlier this week, LCSD Business Administrator Jeff Barben said homeowners with an average property value will actually pay $12.24 above the certified tax rate. Charlie Roberts, public information officer with the Utah State Tax Commission, said that’s not accurate.
“I talked to our guys — we have no idea where that came from, where that $12.24 came from,” Roberts said. “I’m not sure where his calculations are coming from on that.”
He also said Barben’s statement that the LCSD rate “is actually the same” as last year is misleading.
“Where he says the rate is the same, that’s just incorrect,” Roberts said.
Josh Nielsen, tax rate manager for the Utah State Tax Commission, said Barben was correct that the certified tax rate does not account for the school district’s decrease in the debt service levy, as required by state statute, but it still includes the state basic property tax.
“It does make it go up a little bit, but it kind of is what it is, and I feel sorry for them, but the add is calculating according to statute correctly,” Nielsen said.