Bond burden comes due for Salt Lake City residents

SALT LAKE CITY — While the clouds of economic gloom continue to darken the skies over the Beehive State, a perfect storm of timing and circumstance will have most capital city residents looking at a 16 percent increase in property taxes in the coming year.

Though a $19 million budget shortfall for the current fiscal year was overcome without a tax increase, mostly through program cutbacks, reduction of noncritical services and the elimination of almost 70 jobs, Salt Lake taxpayers who own average-priced homes still likely will see their property tax bills go up in excess of $100.

Notices began going out this week, and city officials already are beginning to hear a collected chorus from residents asking, "Why?"

The short answer, Mayor Ralph Becker said Tuesday, is mostly due to a pair of voter-approved bonds starting their payback cycles at the same time.

"The debt service on both the public safety building and recreation complex are beginning this year," Becker said. "We tried to keep this on the radar for residents, knowing they would both be showing up at the same time."

In 2003, voters approved $15.3 million for the first phase of a soccer and sports complex, now slated for a site near the Jordan River, and last year, a $125 million bond to construct a new public safety building got a resounding thumbs-up at the polls.

Now, the time to start paying those bonds begins, and a total of $9 million is due in the coming year to cover the loans. What that means for taxpayers is about an $87 hike on an average home, amounting to about 12 percent of the new increase.

But that's not all.

Salt Lake City budget director Gina Chamness said the remaining approximately 4 percent is being collected to cover a property tax judgment levy and funds related to a dispute between Salt Lake City and Salt Lake County over taxes collected for emergency services. Taken together, they amount to about $34 on a $254,000 home.

Another factor adding to current taxpayer consternation is the process of the state's truth-in-taxation statute, which replaced tax limitation law in 1985. Truth-in-taxation makes tax rates revenue-driven and is aimed at keeping the stream of money collected by state and local governments relatively "flat," outside of new growth.