FARMINGTON -- If city and county officials in Davis County took advantage of a new state law, government coffers could be richer to the tune of $8.5 million.
But for the property owner of an "average" home with a $167,000 market value, total property taxes would increase about $110, to approximately $1,261, said Steve Rawlings, Davis County clerk/auditor.
Under previous guidelines, the taxes on that same home would increase about $14.
But the proposed State Tax Commission change is a result of interpretation by those officials and shouldn't be allowed to happen, Rawlings said. "It's a case of taxation without representation."
In addition to the higher property tax rate that would be imposed, because of a mandatory June 22 deadline to set the certified tax rate, no residents would have a chance to protest, much less discuss, the change.
Rawlings got word of the proposal late last week, and has been working since to keep it from taking place. A meeting of various government officials late Monday afternoon showed most attending backing the previously-used formula.
The certified tax rate is set by the state, and then used as a reference point for cities and other entities to set their rates. It has been based on collected revenues rather than budgeted revenues.
The Davis School District, which receives more than 60 percent of the total property tax rate, would receive an extra $5.2 million, Rawlings said. If the traditional method, accounting only for growth within the boundaries of a taxing entity were used, that would drop to $2.1 million.
If the old method were retained for this "transition" year, Rawlings said the county government would get $1.3 million, all other entities, i $1.7 million.
House Bill 116, sponsored by Rep. Ann Hardy, R-Bountiful, was passed during the 2003 legislative session.
"It seems the legislation was well intended, and needed,"Rawlings said, "but calculation by the tax commission is where I see the challenge. There was concern over the past few years about the way the certified rates were being calculated.
"The intent of truth in taxation was to allow taxing entities to keep revenue received the year before, assuming everything remained constant. They couldn't get compensatory revenue for inflation, but could get it for new growth,"Rawlings explained.
"We're totally behind and supportive,"said Bountiful City Manager Tom Hardy, of Rawlings's interpretation and effort. "We believe the State Tax Commission has erred in their interpretation of the new law. We believe the intent of the legislation was not to give any taxing entity a windfall. It was to be revenue neutral, so it would neither hurt nor help."
He sat on a committee that helped draft the law, which was sponsored for the League of Cities & Towns, Association of Cities and Counties, and had support from the Utah Taxpayers Assoc.
"While we could get about $150,000 more under the Commission's interpretation, we'll be adopting a tax rate that allows only for the new growth and so ours will go up $12,000 (revenue), or less than 1 percent,"Hardy said.
"I think it's the right thing to do. That was the intent of the legislation. I'm intimately familiar with what was done" in formulating the law, Hardy added.
When contacted by the Clipper prior to the special meeting, Kaysville Finance Director Dean Storey said "we've adopted our certified tax rate at what the state tax commission has been. Our position would be to adopt that as adopted by the tax commission, which is probably a little higher than the county has recommended.
"We're a city experiencing growing pains as well," he said. "We've been hurt for so many years by truth in taxation."
Centerville Finance Director Blaine Lutz expressed like sentiment at the meeting.