U.S. Census Bureau Compiles Statistics on State, Local Tax Burdens
|State and local government fees are part of the financial burden placed on Carbon County taxpayers. Some of the fees are not mandatory and may be picked from a selection of choices provided to Utah taxpayers. Optional fees include tuition, school lunches, parks and recreation projects. |
The United States Census Bureau has released the latest comprehensive figures on state and local tax burdens.
The data is from the 2004-2005 fiscal year and, therefore, does not account for recent tax law changes that may reduce Utah's tax burden, especially for income taxes.
Nevertheless, the figures are useful to understand recent tax trends and how the state ranks nationwide, pointed out the Utah Foundation.
Although it is important to measure government fees as part of the tax burden, some fees are not mandatory impositions on taxpayers and should not be included in the overall tax burden.
These optional fees include those for services a taxpayer can choose to purchase from the private sector, from government, or to not purchase at all.
The largest of such fees is college tuition.
In addition to tuition, other optional fees include school lunches, parking in public garages, parks and recreation programs, golfing, rents in public housing, sales of agricultural products and medical services provided at public hospitals.
The Utah Foundation stated that mandatory fees are for the services in which government holds a virtual monopoly.
The mandatory fees include fees for airport services, sewers, solid waste disposal, courts, police, libraries, recording fees, and extractions on property owners for things such as road improvements.
Overall, the burden of taxes and mandatory fees increased by $5.60 per $1,000 of personal income from fiscal year 2003-04 to 2004-2005, pointed out the independent public policy organization.
Utah's ranking in taxes and mandatory fees rose from 14th highest nationally in 2003-2004 to 11th highest in 2004-2005.
If only taxes are counted, the independent public policy organization indicated that Utah's burden would rank 20th highest in the nation.
Most tax and fee burdens have increased since the 2003-2004 fiscal year except for motor fuel and tuition and college fees.
The decline in tuition is likely from fewer students attending college, explained the Utah Foundation. In fact, the Utah System of Higher Education Data Book shows enrollment beginning to decline after 2003-2004.
Compared to all other states, Utah has a high burden of mandatory fees, a fairly high burden for fuel taxes and sales taxes, a moderately high income tax burden, and low burdens for property taxes and corporate income taxes, noted the foundation.
The states with similar tax and fee burdens to Utah are generally small states.
The states within five places of Utah in the rankings are: Maine, Vermont, West Virginia, Wisconsin, California, Rhode Island, Ohio, Delaware, Louisiana and New Mexico.
Six of those 10 have populations smaller than Utah, while two are medium-sized states - Wisconsin and Louisiana - and two are large - California and Ohio.
Small states can often face challenges providing public services with limited economies, which can drive their tax and fee burdens higher, pointed out the foundation,
With Utah's large population of children and rapid population growth, two main public finance challenges are providing sufficient funding for kindergarten to 12th grade schools and financing transportation and other infrastructure needed for growth.
Utah's tax and fee burden has trended upward since 2002. However, significant tax reforms and reductions were enacted during legislative sessions in 2006 and 2007. These changes should reduce the tax burden on Utahns in future years.
Utah's rankings against other states will change, since tax reductions have been enacted in other states as well.
Utah Foundation found that, looking at the western states, Utah ranked fairly high in overall burden of taxes and mandatory fees - third highest in the West.
Mandatory fees in Utah are the highest in the West. In fact, over the past 13 years the mandatory fee burden in Utah has gone from 16th to third highest nationally.
Utah's individual income taxes are third highest among western states, where three of the states do not even impose this tax. Utah's sales taxes are in the middle of the western states but towards the low end if the two states that have no sales tax are excluded. Utah's property taxes are the third lowest in the West, and fuel taxes are fourth highest among the group, concluded the foundation.