Providence taxes

A Providence resident shares concerns with the City Council during Monday’s truth in taxation meeting.

The Providence City Council chambers were filled to capacity on Monday evening for a public hearing on the city’s proposed tax increase. People sat on the floor or stood around the edges, while others listened to the meeting from the hallway or via a video feed in another room.

Like 12 other taxing entities in Cache County, Providence is proposing property tax increases this year above the certified rate set by the Utah State Tax Commission. To guarantee cities, counties and school districts receive the same amount of revenue they did the previous year, this rate is essentially determined by dividing the previous year’s budget revenue by the current assessed property values.

Of the proposed tax increases throughout the county this year, Providence’s is significantly more than any other entity at 67.74%. However, Mayor John Drew said since that number was determined, adjustments have been made to the city’s budget and the rate will likely increase at 53.2% instead.

“I’m not sure with the tax increase that we’ll be getting that I may be able to live in Providence,” said one man to the council during the meeting.

Drew said the main reason for the proposed rate was a significant increase in the cost of their fire fighting services contract with Logan city and the need to hire three new city employees, including a city manager.

During the meeting many residents expressed concern for such a large increase all at once and asked about what other rates may be increased as well. Suggestions were made to perhaps slow down the process on hiring new employees.

In contrast, council members said the can had been kicked down the road for too long and that changes could no longer be put off.

“Every decision we make, somebody is unhappy and we get criticized for every single decision we make,” Drew said. “It’s a tough job and the toughest is to talk about tax increase or a utility rate increase, or whatever it is, because it impacts everyone.”

When entities want to increase tax rates beyond the certified rate, they are required by state law to hold Truth in Taxation hearings during the summer, like the one in Providence, so the public can voice their opinion on the matter. Increases made each year are permanent changes to the tax rate.

In an article published by The Herald Journal last year, Cache County Chief Deputy Auditor Dianna Schaeffer said this is the only way residents who don’t want their taxes raised can make a difference.

After Providence, Smithfield, Newton, Hyde Park and Millville come in next with increase proposals between 28 and 30 percent. Although the proposed percent increase is similar among these four municipalities, a new rate would be felt differently in each community.

In Millville, where a 29.9% tax increase was proposed, the average dollar increase would be $29.86 per year for residential taxpayers. In Smithfield, the increase of 29.06% would look like an average increase of $56.81 each year. These numbers are higher for commercial taxpayers.

Among the other nine entities proposing tax increases this year, the amounts range from 3.26% in Cornish to 25.23% in Mendon. Aside from Providence, the largest proposed increase in terms of the dollar amount comes from the Cache County School District with a 13.98% rate increase which equals an average increase of $73.59 per residential individual.

Reasons for increasing the rate vary from entity to entity. Mayor Ed Buist of Mendon said his community needs the money for upkeep and maintenance on roads, buildings and parks. Additionally, the community needs to expand its cemetery. In an email to The Herald Journal, Buist said it is unlikely the city will increase taxes next year, but depending on growth it may happen again in two years.

For Millville, Mayor David Hair said the increase in revenue would be used for the city’s much-needed sewer system and for water-related projects.

“We’ve got to find a new water source and are possibly looking at secondary pressurized water. Unfortunately, all of that costs money,” Hair said.

Hair said the costs related to the water and sewer projects will determine whether or not the city has to raise taxes next year.

Some entities, like the Mendon City Council, will vote on whether or not to approve an increase the same night of the hearing. Providence, on the other hand, will wait until its next council meeting on Aug. 13 to vote. Drew said it is up to his discretion as mayor whether or not public comment is taken at that meeting.