School property tax reform proposed

Two legislators are proposing a bill that would drastically change the way schools charge property taxes.

Rep. John Dougall, R-Highland, and Rep. Wayne Harper, R-West Jordan, are proposing to eliminate the 12 property taxes that school districts are allowed and mandated to charge and combine them into a single property tax.

The proposal would also provide for an increase in the state sales tax rate to lower the property tax schools charge residents.

A 1 percent increase in sales tax on food and nonfood items would yield $400 million a year. A 1.5 percent increase would yield $600 million, and a 2 percent increase would yield $800 million.

The sales-tax increase could also be calculated without an increase in food sales tax, Dougall said, adding that he wanted to get the proposal out so legislators and the public could begin talking about it.

A 1 percent increase in sales tax on nonfood items alone would yield $375 million, he said.

The sales-tax revenue would be distributed based on the weighted pupil unit.

Dougall says that although his proposal would provide some relief for homeowners, the increase in sales tax would make up for a decrease in property-tax revenue.

The proposal found some friends in the House Revenue and Taxation Committee.

Rep. Merlynn Newbold, R-South Jordan, said she's excited for the proposal. She said she supports combining all of the school property taxes into one levy.

"I think it is a lot simpler for the public to understand," she said.

Bert Hulet, a Bountiful resident who has been outspoken since property values and taxes surged in Bountiful in 2007, said he's in favor of shifting some of the schools' revenue to sales tax because everyone who consumes products is required to pay the tax.

Salt Lake County Assessor Lee Gardner congratulated Harper and Dougall for thinking creatively.

"The idea of each student being able to receive the same type of schooling, at least based on dollars, is attractive to me," he said.

Gardner cautioned that without specific language, the legislation could allow school districts to gradually raise property taxes to current levels.

Ron Mortensen, a Bountiful resident, addressed the committee in behalf of the Citizens' Coalition for Tax Fairness, a coalition of residents statewide who want to fix Utah's property-tax system.

Mortensen said he's been anticipating this bill and looks forward to supporting it.

He agreed with Gardner and said the bill needs to prevent "backfilling," or the ability of taxing entities to increase property taxes.

Rep. Tim Cosgrove, D-Murray, said he's concerned that a shift to a higher sales tax rate could lead people to make more purchases online from other states. It could also lead to more Utah property ownership from people outside of Utah.

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