How has the legislature hurt taxpayer re: property taxes and how is the state creating tax incentives to have out of state corporations buy up our housing stock and increase housing prices and taxes?
As we have watched our property taxes go up, we wonder why, as the rates are supposed to protect us from increases just because our property value went up. It isn't supposed to do that. So why have our property taxes gone up, even when the entities such as school boards or cities haven't raised them?
Several factors. The formulas for property taxes are designed to keep a stable income for schools and cities. If your property values go up or down, they are still getting the same taxes.
When the government gives a large corporation or a sports complex a property tax break, the formula designed to keep things stable, raises everyone else's taxes.
When some corporation from Texas buys up 45 houses in Salt Lake County, and rents them out, our government gives that owner the same property tax discount that a single owner gets. The 45% Residential Exception. However, if you have a 2nd home or cabin, you pay the full property tax on it and do not get the 45% Residential Exception.
If we started to change this 45% Residential Exception for corporations that own large numbers of houses and move over time to restoring the full property tax, the corporations that have purchased all our housing stock would start thinking about purchasing homes in some other state, letting our residents have a fair chance of buying a home without competing against these corporations. It would also lower everyone else's property taxes. If done over time, it would be less likely to raise rent rates.
The Utah Legislature passed a bill in 2015 that I voted against. While it had a good goal, it raised property taxes statewide without the typical truth-in-taxation hearing we make other government entities have. The legislature changed the formula designed to protect us from property tax increases when our home values went up. The next year it had raised $75 Million, and the legislature put it in a fund called the State Basic School Levy. If you look at your last year's property taxes, you will see it is almost 12% of your property taxes.
It didn't start that big, but a couple of years later the legislature changed the formula for 5 years to have that fund grow even more.
While the intent was to help school districts like Salt Lake City and Granite compete against Park City, the solution to raise our property taxes without asking us or telling us was a mistake.
The legislature should fund this though the education funds and not from property tax increases.
Vote for Fred C. Cox, House District 30
