All you need to know about property taxes — at a cost of $1,600
City Hall has published a flier explaining the reasoning behind Park City Manager Tom Bakaly’s request for tax increase and other tax-related topics, distributing the information in the early days of the municipal budget talks.
The flier was sent to postal patrons and is labeled "2010 Property Tax Increase Proposal." It outlines financial information about the municipal government and discusses City Hall’s desire to shift its revenue stream more toward property taxes than sales taxes. It labels sales tax "more volatile" than property tax.
"In future recessions, cuts in City services, which are felt most acutely in bad economic times, are likely to be more severe unless property tax is restored to the role of primary municipal revenue," the flier says.
The flier, meanwhile, breaks down how property tax collected inside Park City is distributed, with City Hall’s portion being 14 percent of the total bill. Park City voter-authorized bonds for open space, pedestrian-bicyclist improvements and the Park City Ice Arena add another 9 percentage points to the municipal total.
The Park City School District collects 51 percent of the property taxes, Summit County takes another 12 percent and the Park City Fire District receives 11 percent. Other taxing entities receive the remaining 3 percent.
The tax increase that Bakaly has proposed will bring in approximately $440,000 in extra revenue for City Hall, the flier says. The tax increase is part of an overall financial strategy that also includes widespread budget cuts. The flier says more than $1 million in cuts are under consideration on top of $1 million that was carved from the budget last year.
The flier provides figures such as noting that the average 2009 property-tax bill in Park City for a person owning a primary residence was $3,800. Of that sum, City Hall received $550.
Bakaly argues that the tax increase, pegged at 6 percent, is needed to keep pace with inflation. Bakaly wants a 6 percent increase every two years starting in the 2011 fiscal year, which begins in July, until 2025. City Councils in the future would not be bound by Bakaly’s schedule, though.
City Hall has relied on property taxes from new developments to boost the municipal coffers, but the slowdown in recent years has carved into that revenue stream.
"This means that without new development, Park City’s property tax revenues would stay exactly the same year after year. Since the expenses for city services paid for by property tax grow with inflation, property tax loses purchasing power over time," the flier says.
City Hall printed 7,200 copies of the flier at a cost of $1,600 — $1,000 in mailing costs and $600 to print and fold them.
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