July 27, 2010
Sandy residents could see a property tax decrease in 2012, but the city is hoping they won’t want one.
The city is holding a truth in taxation hearing Tuesday, Aug. 3, to discuss shifting its current property tax levy from bond payments to the general fund. The bond for City Hall will be paid off, and the city hopes to redirect those tax dollars into the general fund to help with several projects.
The actual tax levy would increase, said city spokeswoman Trina Duerksen, but because the bond taxes would be paid off, residents’ rates would remain unchanged.
The extra funds could immediately be put to use, said Arthur Hunter, the city’s director of finance. Hunter has been trying to create workable financial models for the city’s future, but has struggled due to lack of a long-term revenue stream. The city had to pull money it had saved for several projects to provide basic services during the recession, and is still trying to recover.
Those projects include remodeling the Alta Canyon Recreation Center and the city’s Parks and Recreation building, which could now benefit from the proposed shift. The money has not been earmarked for specific uses, Hunter said, but residents have been requesting those projects for quite some time.
Sandy’s property tax burden is relatively low, according to a recent city audit. In Salt Lake County, only tiny Bluffdale and Alta have smaller levies.
Having a steady stream of revenue for the general fund won’t be enough alone, Hunter said. Until the economy recovers, basic services remain the focus. Maintaining the tax rate would be a strategic move to get through the slump and begin saving money, but large-scale projects may still require bonding and the sale of city property.
“If they want to do the projects, they’re going to have to have a permanent funding source to pay the bonds,” Hunter said, adding that he believes long-term planning is important. “I think what citizens want is some stability.”
The Utah Taxpayers Association is evaluating the proposal, said vice-president Royce VanTassell, though so far “we haven’t come to any conclusions as to whether Sandy’s proposal is justified or not.”
The tax watchdog organization carefully combs though city budgets each year, looking for savings that could reduce the burden on taxpayers. The group may send a representative to the meeting to speak for or against the proposal, VanTassell said, depending on its findings.
If the proposal fails, Hunter and his staff plan to run the proposal next year and again in 2012. Hunter favors sooner rather than later, as it will allow for continuity in the tax rate, rather than a cut one year and a raise the next, as would occur in 2012. If the proposal passes and the economy rebounds, Hunter believes Alta Canyon or Parks and Recreation could be under construction by 2014, with the other in the planning phase.