Committee OKs freeze on tax rate

A bill that would freeze the property tax rate to benefit schools passed by an 8-4 vote Friday out of the House Revenue and Taxation Standing Committee.

Rep. Michael Styler, R-Delta, told committee members that holding the minimum basic property tax levy at .001754 would stop a trend toward a declining rate. The revenue from that levy goes into the Uniform School Fund for public education.

Since 1992, the tax rate has gone down from .004275 while the total taxable value of property in Utah has risen from about $52 billion to over $114 billion. In that time, property taxes charged has gone from about $224 million to $212 million for 2003 — the 10-year low was $155 million for 1996.

The most recent ranking by the National Conference of State Legislatures shows Utah at 39th in terms of property taxes as a percent of total state and local revenue.

Styler's bill, HB230, would mean the state would collect the same amount in property taxes this year. Starting next year, if the assessed valuation on a property stays the same, so would the property tax. If the valuation goes up, then so would the rate.

"We need to rely on a balanced tax structure," Styler said. The burden, he added, has been shifting to income tax.

The Utah Education Association's Vik Arnold and the Utah School Boards Association's Sarah Meier, also president of the Granite Board of Education, both supported the bill.

Utah Taxpayers Association vice president Mike Jerman opposed HB230, saying that it "circumvents the underlying principles behind truth in taxation."

Reps. Morgan Philpot, Darin Peterson, Craig Frank and committee chairman Wayne Harper voted against the bill.

One fear is that a rate freeze would open the door for cities, counties and school districts to approach the Legislature asking for a similar action.

Philpot, R-Sandy, said he would support a measure that would lift the current caps off of all taxing entities and take the burden of freezing or increasing property taxes off of the Legislature. No such proposal, however, is under consideration.

Other concerns are that a freeze would burden more urban counties and those on fixed incomes.

Styler countered by saying that people on Social Security receive cost-of-living increases.

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E-mail: sspeckman@desnews.com