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Dozens of Utah governments hike taxes after holding back for years

Published October 13, 2013 3:12 pm

Taxes vary widely across state depending on number of taxing entities.
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Thornley King looks around a private junkyard that he and his brothers run in a remote slice of Salt Lake City at 7200 West and 2100 South, near Magna. Junk cars are piled high. Cats climb on old tires near a "keep out" sign. Mosquitoes swarm. Next door are other dumps strewn with trash.

He shakes his head when he is told that the area, technically named Tax Area 13G, now has Utah's highest property taxes.

"When you think of a place with high taxes, you think of somewhere with fancy houses, tall buildings or a big, nice industrial area. You don't think of this place. It is dump next to dump next to dump," King says, while zapping mosquitoes.

He pulls last year's tax notice from behind the visor of his old pickup truck. Taxes then were $7,529 on the 8.3-acre junk yard valued at $388,100. Taxes are going up another $200 this year. "I had to borrow money to pay taxes last year. I don't know how I'm going to pay them this year," he says.

As Utahns are receiving their final property tax bills in the mail, they may notice changes as 42 local governments raised taxes this year, nearly twice as many as last year.

Lowest tax • Those receiving the best news in their tax notices live about 200 miles from King in unincorporated Wayne County, home of Capitol Reef National Park — arguably one of the most scenic parts of the state.

Taxes in unincorporated Wayne County on a $225,000 home are $700, less than a third of the $2,458 they would be in King's Tax Area 13G. The median for all the property tax areas in the state is $1,671 on a $225,000 home, according to a Salt Lake Tribune analysis of Utah Tax Commission data.

"We strive to keep taxes low here," says Wayne County Commission Chairwoman DeRae Fillmore. "Unemployment here is about 12 percent. ... So we try to fund people's needs, and not necessarily everything they want."

But low — or high — tax rates by individual governments really are only a tiny part of the reason why taxes vary so much in Utah.

Stacked taxes • A key reason is how many different local governments stack taxes on top of each other.

In unincorporated Wayne County, residents pay taxes only to the county and the local school district.

In contrast, King — with taxes that are 3.5 times higher — pays to nine different local governments: Salt Lake County, Salt Lake City, Salt Lake City School District, Salt Lake City Library, Metropolitan Water District of Salt Lake City, Magna Mosquito Abatement District, Jordan Valley Water Conservancy District, Magna Water District and the Central Utah Water Conservancy District.

Almost all of the areas with the highest property taxes in Utah pay to large numbers of local governments, while those with the lowest taxes pay to just two or three. The state has created 1,385 different tax areas because of the many crisscrossing boundaries of its 500-plus local governments that range from cities to counties and districts for fire, police, recreation, cemeteries and water.

Highest taxes • The five highest-taxed areas are: King's Tax Area 13G at $2,458 on a $225,000 home; a slice of West Valley City within the Magna Water District, $2,396; part of Salt Lake City within Granite School District and the Magna Water District, $2,376; the polygamous town of Hildale, Washington County, $2,347; and part of unincorporated Salt Lake County in the Cottonwood Heights Recreation District, $2,334.

The five lowest-taxed areas are all in Wayne County: the unincorporated area at $700 on a $225,000 home; Torrey at $720; Loa at $727; Bicknell, $728; and Lyman, $742.

Besides overlapping tax boundaries, rates make a difference.

For example, many governments that King pays to increased tax rates this year — which catapulted his Area 13G from merely among the highest taxed places to the highest. Salt Lake City raised taxes on a $225,000 home by $62.74; Salt Lake County by $56.31; and Salt Lake City School District by $24.75.

Tax hikes • This year, 42 local governments raised property taxes, compared to 23 last year — with many saying they tried to avoid tax hikes during the recession, but pressing needs forced them to relent now. That means about one of every 11 local governments that charge a property tax raised them this year. A complete list of those increases is online at sltrib.com.

The largest increase was by Tooele County, a $109.52 hike on a $225,000 home, up 68.6 percent. The county's financial crisis was brought on by the closing of Deseret Chemical Depot and drastic reductions in waste-mitigation fees. That has prompted deep staff and service cuts, including cancelling the county fair and closing the swimming pool at the Deseret Peak recreation complex.

Woodland Hills in Utah County had the second-highest hike, $108.65 on a $225,000 home. City Recorder Jody Stones said the city is taking on some significant projects, including developing a new well and replacing Woodland Hills Drive, the main artery in the city, along with other road projects. She said the city wanted to take advantage of the low current cost of borrowing by bonding.

Political pressure — during what is an election year for cities — led several to abandon or ratchet down earlier proposed tax hikes after required Truth in Taxation hearings in August. Local governments must advertise and hold such public hearings any time they propose a property tax revenue increase.

Among cities that abandoned tax-hike plans were Enoch in Iron County; Pleasant Grove; Provo; and Uintah in Weber County.

Enoch had even proposed the largest tax increase in the state — $297 on a $225,000 home, a 113 percent increase, as city officials had argued that they had been using savings in recent years to provide services and needed their first tax increase in memory.

Santaquin had proposed the state's second-largest tax increase at $229 on a $225,000 home, a 100 percent increase. After its Truth in Taxation hearing, the city settled on a $68.68 increase, up 30 percent. The city has said it needs the increase to maintain and repair roads.

Taxes in largest cities • State Tax Commission data also allows comparing taxes among cities. Even though taxes can vary greatly within individual cities because of crisscrossing boundaries of local service districts, large sections of those cities often tend to have the same tax rates. The Tribune compared taxes among such typical areas for the state's 15 largest cities.

The most expensive typical areas in those largest cities are: Ogden, $2,192 on a $225,000 home; West Valley City, $2,132; Salt Lake City, $2,063; Taylorsville, $1,979; and Draper, $1,883.

The lowest taxes among the 15 largest cities are: Provo, $1,454 on a $225,000 home; St. George, $1,515; Orem, $1,524; Logan, $1,567; and Murray, $1,592.

Taxes among the middle group of the largest cities include: Sandy, $1,841; Layton, $1,833; South Jordan, $1,831; West Jordan, $1,797; and Bountiful, $1,687. —

Big differences in property tax

Utah's highest • In a slice of Salt Lake City around 7200 West and 2100 South, $2,458 on a $225,000 home

Utah's lowest • In unincorporated Wayne County, $700 on a $225,000 home

Difference • $1,758

Median property tax bill • $1,671 on a $225,000 home