Property tax monies expected to increase
Statewide property tax revenues are expected to reach $1.69 billion in 2003, representing an $81 million or 5 percent increase from last year.
The estimate is based on rates recently adopted by Utah school districts, counties, cities, towns and special service districts.
The projected figure includes locally assessed real and personal property, centrally assessed property and automobile fee in lieu of taxes.
Taxes paid on real and personal property accounted for $1.52 billion or 90 percent of the total amount, increasing 5.3 percent. Automobile fees accounted for 10 percent of the total real and personal property taxes
The statewide effective tax rate on real and personal property increased from 1.260 percent to 1.286 percent, a 2.1 percent increase.
School district property taxes increased 6.4 percent from 2002 to 2003 and accounted for 64.8 percent of the total statewide increase. School districts increased their share of statewide property taxes from 53.9 percent in 2002 to 54.4 percent in 2003. Alpine School District accounted for nearly a fifth of the statewide school district increase.
Carbon School District also has some impact on that raise due to a leeway vote that increased the property tax for Carbon land, business and homeowners.
County property taxes increased 3.6 percent from 2002 to 2003 and accounted for 13.1 percent of the total statewide increase.
Half of the increase was due to Davis County's 24 percent property tax rate increase. Counties' share of statewide property taxes decreased from 19.3 percent to 19.1 percent.
Property taxes for cities and towns increased 5.1 percent and accounted for 15.0 percent of the total statewide increase.
Cities and towns collected 15.6 percent of all property taxes. Special service district property taxes climbed 3.4 percent and accounted for 7.1 percent of the statewide increase. Special service districts' share of total property taxes decreased slightly from 11.1 percent to 11.0 percent.
Cities continue to divert a growing share of total real and personal property taxes, including the school district, county, and special service district portions, to Redevelopment Agencies (RDAs).
In 2003, Utahns will pay $1.52 billion in real and personal property taxes to local governments, but most taxpayers are unaware that $72 million of this amount, or 4.8 percent of the total, will be funneled to RDAs to subsidize retail activity.
Valuation-weighted tax rates are determined by dividing real and personal property tax revenues by total property valuation. These rates increased from 2002 to 2003.
County effective tax rates are determined by dividing total property taxes charged by all tax entities within a county - including school districts, cities, special service districts, and the county itself by the county's total assessed valuation. Carbon's effective tax rate, set at 0.011544 last year, was the 11th highest in the state. The highest rate was in San Juan County where the rate is 0.015463. The lowest rate is found in Wayne County with a 0.007524 rate. Emery County is ranked among the top five highest with a rate of 0.013082.
When it comes to total rates for individual entities, such as school districts, cities and counties, the picture can take on a different view. For instance, Emery County has the highest tax rate in the state at 0.004558.
Valuation-weighted tax rates vary dramatically from county to county for several reasons. Some local governments are operated more efficiently than others. Nevertheless, counties and school districts with low property tax bases, which may be due to low property values and/or low population bases, need to provide the same services as counties with high property tax bases. However, a high tax base does not guarantee a low tax rate. Salt Lake City has the highest tax rate of any major city in Utah despite having one-third of the state's municipal tax base and ten percent of the state's incorporated population.
In addition to fiscal efficiency, other factors impact average property tax rates. At the city level, property tax rates are impacted by decisions to impose utility franchise fees. Most urban cities impose the fees, while many rural towns do not. City property taxes are also impacted by sales tax bases. Many Utah cities use RDA subsidies to encourage economic development.
School district property tax rates are impacted by enrollment growth rates and assessed valuation per student. Rapidly growing districts with modest to low assessed valuations per student like Tooele, Jordan, Nebo, and Alpine typically have high tax rates.