Tax notice law irks Lehi chiefs

LEHI — The truth, as fans of "The X-Files" say, is out there.

But don't look for much truth in a notice Lehi city will be placing in a weekly newspaper that says property taxes will go up nearly 30 percent.

Lehi leaders are fuming over a state law forcing them to hold a public meeting — called a "Truth in Taxation" hearing — for what they claim is a nonexistent 27.7 percent property tax increase.

City officials are trying to get the word out to the public about a dilemma they face because of a new state law.

Lehi chiefs say home and business owners will see absolutely no change in the city portion of the property tax bill they will receive this fall — currently about $209.63 for a home valued at $150,000.

City revenues from property taxes are actually projected to decrease in the new budget that took effect July 1 — from $2,137,696 collected in the 2003-04 fiscal year to just $2,125,000 for the 2004-05 fiscal year.

But the city will pay for a required notice in the Aug. 5 and Aug. 12 editions of the Lehi Free Press. It will say the city is planning the double-digit tax rate increase.

"At the moment," said Lehi City Administrator Ed Collins, "it's anything but truthful."

The ad notices a public hearing on the issue set for Aug. 17 at 7 p.m. in the Lehi City Council chambers at 153 N. 100 East.

Collins said the root of the problem is a mistake made in 2001 when the county assessor failed to include $200 million worth of Micron equipment as personal property in its tax report.

When lawmakers passed a bill this year, it became necessary to adjust the tax rate for such valuations made after May and prior to the end of the year — a valuation that included the Micron personal property.

The omission and the subsequent legislative action posed a $500,000 impact on Lehi's budget, Collins said.

The only recourse left — despite some haggling with county and state officials — was to advise the public of what looks like a tax increase for this year.

"Adopting the same (property) tax rate is a 30 percent increase, according to the Tax Commission," Collins said. "The bottom line is, the homeowner won't see an increase in his or her taxes."

State Tax Commission officials back what Lehi officials are claiming.

"There is nothing the city could have done to prevent this circumstance," said Denny Lytle, director of the property tax division of the State Tax Commission. "The Tax Commission notes that the requirements of the Truth in Taxation ads require the city to put an ad into the local newspaper, which in this instance, may be misleading. The wording for this ad, set in statute, indicates that the city is requesting a 27.7 percent increase in revenue."

Collins said the city plans to run a second ad side-by-side with the Truth in Taxation notice explaining the circumstances.

But, he fears, people will still misunderstand.

"That ad (Truth in Taxation) has the potential to just really scare people," he said. "It's dumb."

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E-mail: haddoc@desnews.com