Davis issues warning on windfall

FARMINGTON — A tax windfall that county taxing entities could reap this year might look like government downfall to residents, Davis County officials warned Monday.

Fully implementing the 2004 state certified tax would increase taxes overall by 11 percent and generate a one-time windfall — ironically the result of a 1987 law implemented to slow down a rise in property taxes — of $12 million, clerk/auditor Steve Rawlings and chief deputy for finance Jonathan Lee said.

Three wording changes in the 1987 law, including one this year, have created a situation that will give the windfall to any city, school district or other tax-levying agency that takes it, the county officials said.

Also, under the law, no truth-in-taxation hearings are required to increase taxes under this year's certified tax rates, they pointed out.

County treasurer Mark Altom told the group of city managers and other local officials that the intent of the legislation was not to create a windfall.

"The proper thing to do is what was intended, not to take a windfall," Altom said. "We support truth in taxation. The prudent, honest and moral thing to do is to not take a windfall, and I say that as treasurer and as a taxpayer."

Rawlings said his office had expected revenues for the county and other taxing agencies to remain steady. But when he saw those revenues were increasing significantly, he and Lee started examining their projections for the budget year beginning July 1 to see what made the difference.

Under preliminary figures calculated by Rawlings' office, the new certified tax rate for Davis County cities shows a windfall ranging from 6 to 24 percent with other taxing agencies ranging from 6 to 114 percent.

Rawlings said the county's intent is to raise only $3.6 million in new tax revenues or 3.14 percent.

The value of the average home in the county has increased to $167,000 from $164,000 last year, he said. Last year's average homeowner paid $1,150 in property taxes, which could rise 9 percent to $1,256 under the certified tax rate. However, Rawlings said, the county is recommending taxing entities increase property taxes 2.1 percent for an average property tax of $1,175.

Cities and other taxing agencies can accept or reject the county recommendations and "ultimately, it's up to the city councils and the various boards to decide on their tax rates," Rawlings said.

Bountiful City Manager Tom Hardy said his city will take a small revenue hit, "but if we are to keep faith with the people, we can't take the windfall. Any taxing entity could use the money, but it's not the intent of the law."

Utah Taxpayers Association official Chad Vanderlinden applauded the action by Davis County.

"This shows great leadership. They are looking out for the taxpayers," he said. "Entities can raise taxes, they just need to make a case for doing so and take it to the taxpayers in a truth-in-taxation hearing."

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