State corrects error, sets new certified tax rates

The Utah Tax Commission giveth and the Utah Tax Commission taketh away.

Misinterpretation of an amended state law regarding the calculation of property tax rates caused the commission to send Utah's 29 counties artificially high rates. It meant as much as a $70 million windfall to local taxing entities statewide, according to one tax watchdog group.

The state's more than 600 taxing entities, including cities, counties and school districts, could have essentially raised property taxes without public hearings.

But the tax commission recalculated the complex formula this week after several counties and the Utah Taxpayers Association questioned the inflated numbers.

"It just means, 'Whoops, we have a new set of certified tax rates for your entity that aren't artificially high,' " said Larry Newton, director of finance and statistics for the State Office of Education.

It also means many cities, including Salt Lake City, that adopted annual budgets using the inflated rate in the past week to meet a state-mandated deadline will have to reconsider their budgets or hold truth-in-taxation hearings if they opt to stay with the original rate.

Salt Lake City doesn't intend to adjust its budget until it sees the new numbers, said Rocky Fluhart, deputy mayor.

"I think every city in the state, at least in our county, will be in the same boat," he said.

Had local government officials kept quiet, residents across the state could have been unknowingly stuck with a bigger tax burden.

The tax commission's original certified tax rate would have cost the owner of an average home in Davis County, for example, $106 more. The increase would have varied from place to place.

Homeowners and businesses will pay about the same as last year under the refigured rate.

Lee Brennan, state property tax division deputy director, said staff members won't make the mistake again. "We should not have any surprises like this next year," she said.

Mike Jerman, vice president of the Utah Taxpayers Association, commended Salt Lake and Davis counties for calling attention to the error, which could have brought local governments and school districts unexpected revenue — nearly 11 percent in Davis County.

"With the exception of Salt Lake County and Davis County tax entities, I suspect a lot of local governments are going to be upset at us again," he said.