Property tax levels have moved up steadily throughout most of the 1980s, according to the Utah Foundation, a private tax research organization.
But an initiative petition now being circulated in Utah would limit property tax rates to three-fourths of 1 percent of fair market value on residential property and to 1 percent of fair market value on other property. Because of the way `fair market value' is defined, the tax limits would be about 20 percent less on appraised value or actual sales value.The foundation, which recently did an analysis comparing residential tax burdens, reported that the average property tax on a $75,000 home in Utah in 1987 was $731, or 0.97 percent of market value. This compares with an average tax burden of $723, or 0.96 percent, in 1986, and $552, or 0.74 percent, in 1981.
The figures are based on statewide averages. Because of differences in the property tax rates imposed and discrepancies in the valuations placed on properties for tax purposes, the foundation reported there is a wide variation in the property tax burden across the state.
In 1987, for example, the average property tax charged on a home with a sales value of $75,000 ranged from a low of $381 in the unincorporated area of the South Summit School District, to a high of $882 in the city of Sandy.
Utah voters amended the state constitution in 1982 to permit a modified classification of the property tax. As a result, the effective tax level for some types of property is considerably higher than it is for others, the foundation reported.
For example, the foundation explained, the tax level for non-residential locally-assessed property is one-third higher than it is for owner-occupied residential property, while the tax level for state-assessed and personal property is two-thirds greater than the residential tax level.
According to the study, the average statewide effective tax level for the several classes of property in Utah last year were as follows:
Owner-occupied residential, 0.97 percent.
Other locally-assessed, 1.29 percent.
State-assessed or personal, 1.62 percent.
The foundation analysis observes that the initiative proposal would result in a substantial cut in property tax revenue. One study by the Utah Office of Planning and Budget and the Utah State Tax Commission placed the revenue loss at $176.8 million, or nearly 25 percent of all property tax revenue.
While the revenue loss would affect most school districts, cities, counties and special districts, the fiscal impact would vary widely among the communities of the state, the foundation reported.
In some taxing entities, the tax limitation proposal would force a 45 percent to 50 percent reduction in property taxes, while some taxing jurisdictions might not be affected at all. The property tax, however, is only one source of revenue for local units, and the percentage reductions in property taxes do not necessarily represent percentage reductions in total budget receipts, the foundation reported.