Deseret News | Utah lawmakers mull overhaul of property-tax system

Reader comments
Utah lawmakers mull overhaul of property-tax system

Taxed out! | 2:09 p.m. June 18, 2008

Tax assessors in Utah are appointed! This means they are friends to someone in office. This system isn't fair, never has been, or will be. Tax laws in Utah are unfair. Utah government is one of the most greedy in the country. First of all we don't want or need most of the services the state provides. All we need is good roads to get where we need to. Schools should be tuition based so those attending pay for it, not forced extortion from state government. Utah should learn and do what the largest religion in the state has done for many years. Use a consumption tax only. Those who buy pay! Or those who use pay! Until this is done any tax system is corrupt, and unfair to someone. The largest religion in this state is doing quite well with the system it uses. So would the state.

Jon W | 2:21 p.m. June 18, 2008

Since we seem to be stuck with property tax, we ought to make it as fair as possible. My idea is to cap the tax at the level it is the year the mortgage is paid off. This would encourage people to pay off their mortgages sooner and protect them from being taxed beyond their ability to pay. If the owners decide to buy a more expensive house, they are thereby demonstrating their ability to pay higher property taxes as well.

Better yet would be to eliminate taxes on non-income producing property.

Earl | 2:34 p.m. June 18, 2008

I'm with Jon W on this one. Private property is the foundation of our economic system, and giving government the power to threaten property owners with confiscation for inability to pay runs counter to that concept. Taxes on non-income producing property is especially troubling for those on fixed incomes. It forces them to sell just to keep from going under.

Comments continue below

Guaglione | 2:37 p.m. June 18, 2008

The thing is the government's going to get its money one way or the other. The problem with the Prop 13 type tax system is that the tax rate is attached to the house at the time it's purchased.

For example: Imagine 2 houses, identical in every way, right next to each other. Each is built in 1988 for a cost of $100,000. The tax on each increases by 2% each year, while the fair market value increases by 5% each year.

After 20 years one of the houses is sold. Its property tax basis is then set at the current market value ($265,000) at that point. The other house, the one that didn't sell, is only taxed at $149,000.

One of the good aspects (if there are good aspects of taxes) of the property tax is that it's generally more fair across the board. People are taxed on the value of what they own. If someone wants to pay less tax, they can own less. Why would we let the legislature screw up the one fair tax we have?

Anonymous | 2:42 p.m. June 18, 2008

Tax assessors are elected, not appointed.

Former California Resident | 3:12 p.m. June 18, 2008

Prop 13 in California is completely unfair to new, younger homeowners. In Newport Beach neighbors that paid $43,000 for their ocean view homes in 1966 are paying $430/year in property tax while the neighbor that buys a home in 2006 for 3.1 million pays $31,000/year. This tax structure discourages older homeowners from "trading-up, and discourages young families from buying expensive homes due to the tax burden.

jackhp | 3:37 p.m. June 18, 2008

Taxed out,
I don't think you know what you're talking about. The largest religion in the state takes a lot MORE from its members than the state does (10% versus a maximum of 5%) and it's NOT a consumption based system. They'll take 10% of your income whether you spend it on anything or not. I'm sure the state could do quite well if they implemented a 10% income tax but I don't think you'll get too far touting that as a "fair" tax plan.

Anonymous | 3:43 p.m. June 18, 2008

A California-style Prop 13 property tax schedule would be a disaster for Utah's public education system... causing shortfalls within the first 24 months it is enacted, further complicated by our high student to classroom ratio that California doesn't have. So, comparing Utah education/tax policy needs to that of California education/tax policy is like comparing apples&oranges.

The only part of Prop 13 that makes sense for Utah is a mill cap on the amount taxed, but those mills need to still be on 'current' assessment values.

When Prop 13 is closely looked at, it is found that it was a property tax scheme aimed solely to benefit the rich and privileged... for numerous reason that the limited word count here prohibit discussing. It's a sort of for the rich/privileged reverse welfare scheme... same as how Corporate Socialism/Welfare schemes manipulate the tax code to work for them while working against working middle-class small business America.

It's probably best to leave the property tax system in place as is. There's complainers and moaners, no matter what the system.

One thing though, school part of property tax should be exempted from retiree/surviving spouse propertyTax up to a certain amount of the assessed value.

Overtaxed | 3:43 p.m. June 18, 2008

The property tax is anything, but fair. Many entities pay no taxes. Assessors can't effectively determine fair market value. Some regions hold their property values artificially low, causing taxpayers in other regions to shoulder the extra tax burden.

There is no such thing as a fair tax. Only a voluntary transaction can be fair, for both parties. Taxes rely on compulsion which eliminates fairness.

JB | 3:52 p.m. June 18, 2008

Jackhp

The largest religion in the state takes $0.00 from it's members. It member's freely give a tithe that they thing is fair and represents 10% of their increase.

Anonymous | 3:59 p.m. June 18, 2008

Acquisition-based valuation is a scheme to shift taxes from retirees to young working households.

I would expect the "family values" crowd at the Eagle Forum and the Sutherland Institute to oppose this.

Dougall should be ashamed to call himself a conservative for supporting this.

CMS parent | 4:08 p.m. June 18, 2008

Mrs. Herbert is biting the very hand that feeds her. Her salary and all of Utah's education funds come from the very money she is complaining about. If we all pay a little bit more we might even get Utah's education funding up to 50th out of 51st instead of last place as usual.

I'll gladly pay a little more in taxes if it will go to my kids' teachers. They are definitely overworked for the pay they get.

Anonymous | 4:23 p.m. June 18, 2008

Look at your tax notice, most of it goes to education so for those of us who have no kids, that could be great. But don't blame us when the schools in Utah go broke. utah couples have alot more kids per- home then anywhere in the country. Those who pay the most are those who have no knids in the system. Look at what education is taking from the property tax. I'm not saying I should not pay the cost to educate in this state, but if you cap what can be raised from property tax don't come back and want it from another pot. Think before re-acting.

John | 4:29 p.m. June 18, 2008

I am definitely in favor of taxes based on a real number, what I paid for the house. It makes no sense to tax on FMV because the housing market is so illiquid how can anyone prove a house's value on any given day? I suppose with the current market crunch we should see property taxes decrease next year, but they won't. They only go up. And where is the wherewithal to pay? I am for a Prop 13 structure. To the point of retireees not paying their fair share, well, how many retirees have children in school? And no, I am not a retiree. I am 27. I just like the idea of knowing my true costs in life.

And to the idea of tithing being voluntary, well ok. But remember, there are consequences for noncompliance. No temple recommend. Scorn of the overly pious. So really, there is a compulsary component to even tithing.

jackhp | 4:39 p.m. June 18, 2008

JB,
What does "10% of their increase" mean?

"Take," "give," it's all relative. How does the question go to get a recommend, "Are you a full tithe payer?" Seems a bit like extortion to get to heaven to me, but that's just an opinion of one.

Either way, the point stands that the Church gets more from its members than the state does. If the state was offering salvation do you think they could get 10%?

who's complaining? | 4:52 p.m. June 18, 2008

Look the property tax has gone up because the value of the house and land went up. Wait. The house goes down in value, the tax goes down.

As pointed out in other comments. Those in power to TAKE your money (et. taxes) will figure a way to get it from you. If not with property taxes, then with something else.

Just make sure the money goes where it is suppose to go and isn't "borrowed" into some other pot for someone's pet project.

jackhp | 5:09 p.m. June 18, 2008

John,
With our current Truth in Taxation system for determining property taxes they most certainly do go down. How do I know? Because even though my assessed property value went UP last year, my taxes actually went DOWN. Why is that? Because my assessed value increased at a lower percentage than the average increase.

This is actually one topic where the Utah Taxpayer's Association gets it right. Google their site (can't post it here) and read up on how Truth in Taxation actually works. Assuming no growth and no actual increases in levied taxes, there will be taxpayers who pay less, taxpayers who pay more and taxpayers who pay about the same. But overall tax collections will remaing the same.

If anyone has a problem with their assessed value, which is based on the market value as of January 1st each year, then they can always appeal. Mistakes are made and corrections are made every year.

Truth in Taxation works. It may need a little tweaking to prevent huge run-ups such as those seen in the Huntsville area last year, but overall it's more fair than a Prop 13 type system.

Alfred | 5:53 p.m. June 18, 2008

I agree with the above comments about the unfairness of California's Prop 13 tax approach. I lived in that state long enough to see how it played out in real life. Prop 13 ruined the CA schools (and a lot of other public services) by choking off vital funding.

When I moved to California from Utah in 1988, I wound up paying three times as much tax as my next-door neighbor living in a similar house. I was glad to get out of that "late, great state" and come back to Utah after 15 years of paying through the nose!

I'm an grandfather now and have no children in the public schools, but I'm glad to pay my share to support education and other services. There may be a problem with our tax law (or how it is administered), but an unfair Prop-13-like approach is not the answer!

arc | 6:10 p.m. June 18, 2008

The value of the homes needs to be as accurate as we can get it, for existing homes or new. We do not need to follow Calif.

The tax rate of the home can be adjusted down. I personally object to how much property tax goes to the school district to waste, but that isn't a good reason to change the valuation system.

We need to keep the current valuation system, however, I don't have a problem with lowering the tax rates.

kITCHY | 7:03 p.m. June 18, 2008

My husband & I are on a fixed income. We bought our home about 15 years ago at approx $100,000. It is now estimated at $275,000. We are paying taxes more than double our original taxes and we can't afford it. I recommend that the state of Utah follow Texas taxing where elderly people on fixed incomes have taxes that remain stable at the age of 65 and never go up. Understand that on social security we don't have raises that meet the cost of living increases and yet we shouldn't have to give up our homes that we have worked our entire lives for because the state is greedy when it comes to property taxes. Please help!!!!

Beware of Sound Bite Media | 7:55 p.m. June 18, 2008

Dougall said he doesn't see Utah adopting CA's Prop 13. Dougall said that we need to (1) fix the shock of unpredictable property tax increases and (2) reduce the burden the property tax places on homeowners which causes them to sell and move because they can't afford their property tax. Dougall and the Interim Revenue and Taxation committee would like recommendations regarding solutions to these issues.

Moneybags | 8:50 p.m. June 18, 2008

why don't people plan for retirement. Everybody knows property taxes will keep increasing during retirement so why do people not factor it into their retirement plans. Plus social security was not set up to pay for a persons whole retirement. I have little pity for those who did not plan.

What is cost of bread in 10 yrs? | 9:13 p.m. June 18, 2008

John,

"To the point of retireees not paying their fair share, well, how many retirees have children in school? And no, I am not a retiree. I am 27. I just like the idea of knowing my true costs in life."

This has nothing to do with the number of children in school and retirees benefit just as much, if not more, everyone else because of public education so they should pay their share.

"And to the idea of tithing being voluntary, well ok. But remember, there are consequences for noncompliance. No temple recommend. Scorn of the overly pious. So really, there is a compulsary component to even tithing."

Tithing is as compulsory as paying taxes and the while the consequences for each may differ both do have consequences. We don't get something for nothing and we should pay our fair share even if we are elderly and don't have children in public school because we benefit from those schools even though we don't have any children enrolled.

To your point about knowing the true costs in life. That is hogwash. You don't, and won't know the true costs in life unless you can see the future.

You benefit. You pay! | 9:21 p.m. June 18, 2008

JB,

"The largest religion in the state takes $0.00 from it's members. It member's freely give a tithe that they thing is fair and represents 10% of their increase."

Hogwash. Like taxes, tithing is compulsory, and there are consequences for not paying just like there are consequences for not paying taxes.

Members of the Church can choose to accept those consequences just like taxpayers can choose to accept the consequences of not paying their taxes. These consequences may differ but they are still very real in the lives of those who choose to live under them.

If you choose to be a member of the Church and to partake of the benefits associated with being a member you are expected to pay 10% of your increase in tithing just like you are expected to pay your taxes if you choose to be a citizen of Utah and the U.S.

You cannot claim to not have to pay for one or the other or that paying taxes isn't voluntary because it's as compulsory as tithing. If you don't want to pay tithing you accept the consequences just like you do if you don't pay taxes.

judeavt | 9:46 p.m. June 18, 2008

I'm from Utah but I have lived in Vermont for many years, and I can't wait to get back to the low property taxes in Utah! We paid our mortgage off five years ago, and have seen our taxes increase dramatically every year since. Our home, valued at around $275K is taxed at around $5,000 per year now. I can't see any benefit in the schools by being one of the best-funded states for education. Anyway, Utahns, stop complaining. You've got it good. You don't even have to worry about the $5,000 it will take to heat this home this winter either. So much for paying off the mortgage.

California Resident | 11:46 p.m. June 18, 2008

If you've ever lived in California, you know that Prop 13 isn't all it's cracked up to be because there is a trade off that often goes unmentioned. For old folks who are on a fixed income, prop 13 is great. But prop 13 creates a dis-incentive for selling property because older people live in homes longer, thus younger couples rent longer due to the inventory shortage and tax assessment. Wikipedia explains it all.

So while Prop 13 seems like a great idea during a housing boom AND during a housing bust, it's not great for a less volatile economy, which hopefully isn't too far away.

randy | 9:40 a.m. June 19, 2008

CMS parent - i dont think she biting the hand that feeds her .. i think that she is asking that they stop SUPER sizing the portions

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