Lawmakers again eyeing property-tax legislation

As the Utah Legislature is gearing up for its 45-day session, which begins in January, legislators are drafting legislation to alter property taxes to bring security to homeowners.

At least 11 bills are currently in the works, and a few of the proposals were discussed during a Wednesday meeting of the Legislature's Interim Revenue and Taxation Committee.

The committee discussed three options for how school districts receive property-tax revenue.

All three proposals play off of an idea vetted in 2007 to repeal 11 levies authorized for school districts and combine them into two levies.

One proposal simply requires a school district to hold an election if the school board wishes to raise the property tax rate above the certified tax rate set by the county and Utah State Tax Commission.

The second proposal, by Rep. Merlynn Newbold, R-South Jordan, would add to the first proposal by increasing what is known as the basic levy and sending the extra revenue to the state to distribute to school districts.

In exchange for the extra revenue, the districts would forgo property-tax revenue from other taxing programs.

The third proposal, by Rep. Wayne Harper, R-West Jordan, takes a different slant.

Based on the first proposal, Harper's bill would increase the state's portion of the sales tax on nonfood items by 1.45 percentage points to yield about $634 million. That extra sales tax revenue would be distributed to school districts, which would forgo some property-tax revenue.

The Legislature began delving into property-tax problems when residents in Davis and Weber counties complained of exorbitant tax bills in 2007.

That's when Sen. Wayne Niederhauser, R-Sandy, promised that if counties couldn't ameliorate property-tax concerns, the Legislature would do it for them.

Davis officials got to work and managed to assess the entire county this year, though that led to a high number of property value appeals.

Davis County Assessor James Ivie told the committee that he doesn't expect to have an outcry in 2009 because all of the values in the county — residential and commercial — have been brought up to fair market value this year.

Niederhauser said his promise still stands: If counties can't manage to make the property taxation process fair for their residents, the Utah Legislature will have to do something drastic.

That drastic move could be toward acquisition-value-based property taxes, he said.

"Fair market value is all over the map," Niederhauser said. "Counties and assessors have this next year to really prove that they can make the fair-market-value system work."

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E-mail: jdougherty@desnews.com