By far, most Utahns are paying a real property tax of only 1 to 3.5 percent of their income, an exhaustive study completed by state legislative staffers shows.
The Legislature's Revenue and Taxation Interim Study Committee heard the report from economic researcher Phil Dean, who wrote it with help from other legislative staffers.
A number of Utahns saw their property taxes jump last year and now their Utah House and Senate members and county officials are running for re-election this year. Dean told legislators his report may help answer "some of the questions you are not getting."
The state doesn't levy a property tax itself. But through the Uniform School Fund, the Legislature sets a property-tax rate that participating school districts must levy.
So legislators are sensitive to the political clamor when property taxes go up, saying they are often held at blame when they actually didn't raise property-tax rates at all other property tax-setting entities did.
The work by the legislative staff was Herculean. It matched the addresses of 400,000 Utahns with their individual income taxes to come up with the comparison how much of one's personal income goes to paying property taxes on their house.
And while some Utahns feel justified in complaining about their property-tax burden, in reality most residents are not paying that much in property taxes compared to their income, said Bryant Howe, deputy director of the Office of Legislative Research and General Counsel.
Still, there are some individual Utahns who, perhaps because they are only working part time or are senior citizens on fixed incomes living in big houses, are paying a considerable part of their income in property taxes.
In some cases, there are special programs that can help those people. For example, banks give "reverse mortgages," where a property owner can get a monthly payment on the equity in his or her house.
However, with the declining value of some homes in Utah in 2008, next year some property owners may see a decrease in the amount of taxes they owe.
Senate President John Valentine, R-Orem, who has no political opponent in his re-election bid this year, said he wants to present the staff's findings to his GOP Senate caucus.
Allison Rowland, director of budget and research for Voices of Utah Children, said she sees one possible flaw in the report property taxes in Utah are not as regressive as the report shows.Rowland said that some homeowners, like young families who buy a big house anticipating a number of children or retired seniors still living in their big house, may both have lower incomes than the big house would require. The report indicates that the current property-tax system may not be fair, but in reality the young families' incomes will grow into the house, and the seniors may leave the house, so tax burdens may be temporary.
E-mail: [email protected]