August 5, 2010

Just a handful of residents made their way to Wednesday night’s City Council meeting on tax increases for property owners in Salt Lake City, voicing little opposition to a potential tax hike.

City officials quickly voted unanimously to end the public hearing and have the final vote on the issue next week.

A potential increase in property taxes would be one of several provisions the city has made to make up for a shortfall in the budget for the upcoming year. The argument between the city and those who spoke against the proposed tax hikes is whether the planned budget for next year made the cuts that were necessary without placing an extra burden on property owners.

After facing an 18 percent drop in sales-tax revenue since fiscal 2009, the Salt Lake City Council approved a budget earlier this summer that found some $20 million in cuts, mostly achieved through program reductions, cuts to non-critical services and the elimination of almost 70 positions.

Included in that approved budget was money to pay for a judgment levy that covers revenue lost due to property value decreases from the previous year. This one-time assessment could collect $1.1 million for the 2010 fiscal year only.

While the opposition was sparse at Wednesday’s council meeting, it was present and vocal. Groups such as the Utah Taxpayers Association were represented among the few people attending.

“It’s just wrong for Salt Lake City to come and slap (taxpayers) in the face and say, ‘We need another $2 million because we’re unwilling to make another $2 million in cuts,’‚ÄČ” said Royce Van Tassell, vice president of the association.

An additional $1 million appeared as a revenue line item that was not included in expenditures. That money is an estimate of what city officials believe was an inappropriate double-taxation for money collected by Salt Lake County for the provision of some emergency services.

Work to resolve this dispute has been under way for months, and as of this week, the city and county have agreed to jointly request a legislative audit focused on the issue. Results of that audit are expected to be available by the end of the year.

Property owners such as Jeff Taylor are riled by the idea of paying extra taxes in a recession-plagued economy. Taylor owns rental properties in the city and said he can see a direct effect of increased property taxes on his business.

“I’m supposed to provide housing at a certain standard,” he said, “and it’s affecting my bottom line where it’s become a huge expense.”

The lion’s share of the increase most property owners will see this year will go toward debt service on about $8.8 million in bonds previously approved by voters. Both the soccer complex bond, $15.3 million approved in 2003, and funding for the new public safety building, $125 million approved last year, go into repayment this year. Payments on that debt will add about $87 to taxes on an average-priced ($254,000) Salt Lake home.

“We’re all being asked to make budget cuts financially,” Taylor said, “but it doesn’t seem like that’s happening at the local level.”

The final vote on whether the city approves the property tax increases will be at 6 p.m. Tuesday, Aug. 10, in the Salt Lake City-County Building.