Many people living across the Wasatch Back were shocked last summer when their property tax notices increased sharply, leading to concerns from homeowners about unequal treatment. While the County Courthouse has stood behind the most recent assessment, a state official determined another Utah agency failed to provide adequate oversight that ensures fair and uniform taxation.

The Office of the State Auditor issued a letter on Jan. 11 addressing issues with property tax equity across Utah, specifically in Wasatch and Summit counties during 2021 and 2022. Each of the state’s 29 county assessors is tasked with conducting property tax assessments, and the Utah State Tax Commission is expected to supervise them. 

However, the state tax commission lacked in its regulatory responsibilities, the letter stated, which caused many taxpayers to pay more because some parcels were not accurately assessed. Both Summit and Wasatch counties were out of compliance with requirements that properties must have values updated to reflect current market data annually and be reevaluated every five years.

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“The state tax commission was not fully exercising the various tools included in the statute so we were reminding them of their statutory authority in terms of oversight,” State Auditor John Dougall said in an interview. 

He continued, “It’s making sure the various players are focused on that objective: fair market value. There are concerns and weaknesses in many of the complaints because people distrust the property tax. Some people feel like ‘Geez, my property tax is being raised year after year after year’ and somebody else is getting lowered for 10 years, that’s not fair. It undercuts the credibility of the system.”

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The state auditor’s letter was primarily focused on inequalities in Wasatch County. Dougall’s office has been looking into the issue there since Aug. 2021, when concerns were verbally shared with the state tax commission. Officials came back in 2022 to review what changes had been made amid growing complaints – which also started coming from Summit County residents – and the state auditor decided to analyze the state.

“There was a culture at the state that we want to avoid surprises, we don’t want to make anyone look bad and we want to hold people’s hands at the county level and help them correct their problems without really being the oversight that [the state auditor’s office] thinks is appropriate,” Dougall said. “There is a certain purpose to helping people, but at the end of the day, you have to be the regulator. We thought that was lacking.”

State statute only allows for oversight through the Utah State Tax Commission, which means no corrective action can be taken through the Summit County Council or other municipal government. Any problems that are identified at the county level should go through the state tax commission, Dougall said, but the current procedures are insufficient to address the problems of uniform assessment. 

The letter also said the state tax commission failed to take corrective action and did not notify the state auditor of property tax inequities.

There are multiple reasons why a property might be assessed incorrectly ranging from oversight issues or an error in a calculation to the possibility of favoritism being shown, according to Dougall. Regardless of the reason, he said, there has to be a system that detects when that happens. The Office of the State Auditor analyzed parcels from various counties to review trends and show staffers at the state tax commission as well as at the county level how technology can track and examine data as well as strengthen other practices – and catch the concerns raised by community members.

Dougall, since taking office in 2013, has worked to act as a regulator and watchdog of other state offices. He said the Utah State Tax Commission has shifted too far to one side, relinquishing too much oversight, with the need to find balance for taxpayers.

The state auditor can’t impose consequences on the Utah State Tax Commission or county assessors, but Dougall anticipated there will be various discussions in the future about how to improve. He offered several solutions to the state tax commission including hiring more staff to determine how a county has complied with property tax standards, providing county assessors with technical assistance when necessary, and implementing corrective action orders if a county assessor fails to follow current mass appraisal standards.

Stephanie Poll, Summit County’s assessor, told the County Council in September that approximately 500 commercial properties and 300 condos fell outside the 5-year detail review. Commercial properties are taxed at a higher rate compared to primary residences, but old assessments could undervalue the property. Many county residents expressed concerns that businesses aren’t paying a fair share compared to homeowners, which shifted the burden. 

The county collects virtually nothing from property taxes, which serve as a stable revenue system to fund public services such as schools, fire and emergency medical services as well as roads.

The County Council approved funding for the assessor’s office to upgrade a software program and, more recently, to hire a data analyst. Poll said the properties scheduled for detailed review in 2023 will be moved to the new valuation modules that have been developed for commercial and condo properties.

“Valuation changes have been occurring, but the new modules will allow the appraiser to make mass updates to these populations that they had not been able to prior to the development of the new valuation modules,” she said. “By 2023 all commercial properties will have been converted and all condo properties converted by 2024.”

Dougall recognized home values are going up across the state, and at a fast rate, which he said further highlights the need for accurate, up-to-date data. He said it’s possible the Utah Legislature may consider passing a bill aimed at addressing property tax inequities.

Poll also indicated the sharp increase in property taxes was the result of the area’s competitive real estate market. There was a 58% increase in the sales price of single-family homes in Summit County in fiscal year 2021. 

“This is my first term in office. The whole reason I threw my hat in the ring in the first place was to make some needed changes that I could see,” she said. “The mass appraisal system in and of itself is not a perfect science by any means, and we look forward to working with the State Tax Commission on changes that may be made throughout all 29 counties in the state.”