“We’re just holding the rate steady.”
“We’re keeping the same tax rate as last year.”
“We’re keeping the tax rate year over year flat.”
Sounds like it’s Truth in Taxation time!
Over the next few months, dozens of taxing entities will mail out their Truth in Taxation notices explaining how much they are raising taxes, what the additional revenue will be used for, and when the public hearing will be held. We will also likely hear variations of the lie, “we just kept the tax rate the same, we didn’t raise taxes”.
Instead of a lengthy discussion about how the tax rate is calculated, let’s get to the point. If a taxing entity wants to spend more, they have to raise taxes. The only number that really matters is the amount spent last year compared to the amount budgeted for next year. If the budget this year is higher than last year (plus the new growth), your city or water district or school district is raising taxes.
Thanks to Senator Wilson’s SB 29 (2024 General Session), taxpayers will have more clarity on the scope and use of the proposed tax hike. The bill, which passed unanimously in both the House and the Senate, requires taxing entities to state the dollar amount of additional tax revenue and a brief explanation of its intended use in the Truth in Taxation notice mailed to taxpayers.
For example, Salt Lake City recently made headlines by proposing a controversial $40,000 raise for the mayor’s salary. If that increase were to necessitate a tax hike, Salt Lake City would be required to make clear that the proposed tax hike was to fund city wages. This transparency helps taxpayers understand exactly where the rising costs of government are originating from, and encourages a healthy dialogue between taxing entities and taxpayers around budgeting.
We recommend that taxing entities go through the Truth in Taxation process every 5 to 7 years to account for inflation and demographic changes. These intervals keep tax increases predictable, manageable and restrained. We understand that rising taxes are sometimes necessary; however, honesty and transparency – Truth in Taxation – makes the whole process a lot smoother.