CACHE COUNTY – Under Utah’s Truth-in-Taxation law, five of Cache County’s 19 municipalities will be holding public hearings in August to justify proposed property tax increases for next year.
Those communities are Hyde Park, Mendon, Richmond, Smithfield and Wellsville, according to a public notice recently issued by Diana Schaeffer, Cache County’s chief deputy auditor.
While the state’s Truth-in-Taxation statute does not technically limit property taxes, it does require local officials to notify their citizens of proposed property tax increases and hold announced forums to hear public responses.
Here in Cache County, those public hearings for proposed 2023 tax hikes are scheduled for 6:30 p.m. on Aug. 9 in Smithfield; 6 p.m. on Aug. 15 in Mendon; 7:30 p.m. on Aug. 17 in Richmond; and 7 p.m. on Aug. 23 in Hyde Park.
The City of Wellsville held its tax pubic hearing on Aug. 2, where officials justified an annual tax increase of $26.67 on the average residential property worth $245,470 and an annual tax increase of $48.49 on the average commercial property worth $446,310.
Utah’s Truth-in-Taxation law is revenue-driven rather than a rate-driven system, according to the Utah Taxpayers Association.
As the value of existing property increases to keep pace with residential and commercial markets, property tax rates generally decrease.
Such automatic reductions in property tax rates keep local governments from getting a revenue windfall simply because the value of existing properties within their boundaries have increased.
Those reduced property tax rates are known as the certified tax rates.
“With values constantly changing,” Schaeffer explains, “the certified rate guarantees entities the same tax revenue each year.
“When an entity is required to notice the public of a tax increase that means they are proposing a tax revenue increase in current and all subsequent years.”
Many entities accomplish that goal by “holding the rate” in a climate of increasing values, she adds. If values have increased, then holding the rate means more tax revenue every year for that taxing entity.
Thanks to the Truth-in-Taxation law, local governments must go through its mandated notification and hearing process if they want to exceed the certified tax rate for their residential and commercial properties.
While the Utah Taxpayers Association played an instrumental role in the enactment of the Truth-in-Taxation law in 1985, its leaders have stated publicly that they do not oppose every proposed tax hike over the certified tax rate. In some cases, they explain, local governments are simply trying to recoup inflationary losses.
On the Cache County website, the Auditor’s Office has translated the proposed local municipal tax increases into dollar and cents terms.
The tax hikes proposed by Hyde Park officials, for example, would increase taxes by $1.27 on the average residential property worth $348,480 and a tax increase of $2.30 on the average commercial property worth $633,600.
The tax hike proposed in Mendon would raise taxes by $82.91 on the average residential property worth $445,640 and by $150.74 on the average commercial property worth $810,250.
The tax hike proposed in Richmond would raise taxes by $9.07 on the average residential property worth $279,610 and by $16.49 on the average commercial property worth $508,380.
Finally, the tax hike proposed in Smithfield would raise taxes by $53.93 on the average residential property worth $359,160 and by $98.05 on the average commercial property worth $653,020.
The locations for tax increase public hearings slated in Cache Valley are 96 South Main Street in Smithfield; 15 North Main Street in Mendon; 90 South, 100 West in Richmond; and 113 East Center Street in Hyde Park.