Homeowners currently pay taxes on 75 percent of their home's value. But if a bill, prefiled by Sen. Haven Barlow, R-Layton, becomes law, homeowners will pay property taxes on only 55 percent of that value.
"This would be an alternative to two or three property tax limitation proposals out there," Barlow said.Currently, state law specifies that 25 percent of a residential property's value is exempt from tax. Under Barlow's SB38, that exemption would gradually increase 5 percentage points a year beginning in 1990 until it reaches 45 percent in 1993.
Barlow's bill will compete against other tax reform measures, including one by Gov. Norm Bangerter, who wants property taxes capped at current levels.
"The more I look at caps, the more it bothers me," said Barlow. "A cap could be a greater hardship on cities and counties than what I'm proposing."
Barlow believes the natural growth in property tax revenues would more than compensate for the lost revenue. He said in 70 to 80 percent of the state, the lost revenue would probably not be felt.
Because of the Utah Constitution's wording, Barlow's bill applies only to residential property valuations. But he said that shouldn't adversely affect businesses, who can pass along their expenses more easily anyway.
Homeowners, however, regardless of income or ability to pay, must pay property taxes - the primary source of income for local government, he said. And property owners are speaking out that something needs to be done.
"It's my opinion that this is a more moderate approach, (as opposed to property tax caps). If you were to take a poll about which taxes people want a hold on, most would prefer we get a hold on property taxes."
Barlow prefers property tax reform to tinkering with the sales tax or further reform on income tax. The Legislature already gave a significant income tax break to low-income households.
"People with lower incomes help pay their own way through the sales tax," said Barlow.
"I feel strongly we should put a lid on property taxes. And I believe the people have spoken that that is what they want."