Summit County leaders leaning toward a property tax increase
Depleting funds in the county’s reserve could threaten services
July 3, 2017
Summit County leaders are strongly leaning toward raising property taxes for the first time in more than 30 years.
Wednesday, county staffers encouraged the County Council to consider various levels of increases to the county's current property tax rate to prevent significant cuts from being made to several county programs.
New growth is the only way property tax revenues can grow other than adjusting the rates through a Truth in Taxation hearing. However, over the last several years the county has not experienced enough growth. That has depleted the county's property tax revenue received from new growth from about $650,000 to less than $150,000 in the general fund and $100,000 in the municipal fund, according to Matt Leavitt, Summit County's finance officer.
"In the past we have used that new growth revenue to counteract the effects of inflation," Leavitt said. "We have been essentially bringing in the same amount of revenue with the exception of new growth."
Leavitt said taxing agencies are encouraged to go through Truth in Taxation every five-to-eight years. Summit County held Truth in Taxation hearings in 2012 and 2013 to adjust the municipal rate. But the general fund rate has not been adjusted since the early 1980s. Leavitt said the increase to the municipal fund ensured completion of road projects and enhancement of law enforcement services.
"Since we had that increase in 2013, the federal government payment for mineral lease funds, which we use for road maintenance projects, has decreased by about $700,000," Leavitt said.
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Summit County has the lowest general fund tax rate in the state Leavitt said. He said the perception is that the county can maintain a low rate because of the high home values.
"But when you factor in the impacts of values against the rate we have the third lowest rate in the county out of 29 counties behind Salt Lake and Utah county," Leavitt said.
In April, county councilors were given several options to consider when exploring how to maintain current service levels, including doing nothing, freezing current rates, lost purchasing power or increasing the property taxes.
Staffers are recommending a 27 percent increase, but also gave councilors the option to raise rates at 15 or 20 percent. The impact on the average taxable value of a primary residence, not market value, at 27 percent would be about $62.45 for a $320,000 home, Leavitt said.
County Council Chair Chris Robinson said property tax increases are difficult to "get people to sign up for." However, he added, "It would surprise me if there wasn't some sort of increase."
"I'm not faulting the idea that we should raise taxes, but I also think we should fully understand what the ramifications are of doing nothing and raising taxes at various intervals," Robinson said. "I think the question is: what we get out of the various levels of tax increases because, the thing is, every dollar counts."
County Councilor Doug Clyde said his first inclination is to suggest the full 27 percent increase. He said even at that rate it will take the county several years to get funds back to where they need to be.
"We don't have enough tax revenue to fund current operations and it's understandable that we need to do something," Clyde said. "With that said, however, the finances of the county are very complicated and it is very hard to parse out what are operational costs versus what are capital improvements are."
Councilors asked staff to present four preliminary budgets based on the various levels of increases. Clyde said they need to understand what sort of limitations might be imposed if the county continues to operate at the same funding levels.
"We needed to understand what, in general, that means. How many fewer miles of road, how many employees might we lose?" Clyde said. "Not that I, or anyone, was looking for draconian measures. But, we have to be able to explain it to the public why we did what we did."
If County Councilors decide to raise the current rates, property owners will begin receiving notices in October about the county's intention to increase tax rates and any public hearings on the issue.
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