Thursday, July 31, 2008

people don't want to give props

The other day, property tax notices went out in Salt Lake County. And people at work in my office were mad and in shock. "$900 more?" One exclaimed, "I will have to sell my home!"
Some proposed increases are huge. The biggest is a 293 percent hike for Clarkston, Cache County. It would cost an extra $465 a year on a $250,000 home there, if approved. (Town leaders did not return numerous phone calls seeking reasons for that increase.)

Some proposed hikes are tiny. For example, Payson is proposing a 0.2 percent hike that would cost just 27 cents a year on a $250,000 home.

News of the hikes come in big, required-by-law newspaper ads and notices mailed to homeowners this month showing the assessed value of their property. (The notices and ads also include the time and place of hearings about those proposed hikes.) A list of all proposed hikes is also on (click on graphic "Truth in taxation, 2008").

Utah's "Truth in Taxation" laws require public hearings and newspaper ads any time local governments propose to raise overall property tax revenues (not rates) beyond what they collected the previous year (not counting money coming from new growth).

The State Tax Commission compiled a list of 85 governments going through that Truth in Taxation process for hikes this year, all of which will be holding hearings during the next month or so as they decide whether to impose the proposed increases.
This is one of the "ironies" of this economic downturn. Prices on fuel and food are rising rapidly (and others gaining more slowly) while home prices tumble and wages stagnate. Yet property taxes are increasing.

This story helps make my case the other day for keeping earmarks around, albeit in a more transparent form. If people go nuts about the rate hikes now, imagine if you got rid of earmarks and reduced federal income tax accordingly (which would have a relatively minor impact on filers' bottom line) but jacked up property taxes to make up the difference in each locality. People would go ballistic. And maybe they should, but it just shows how impractical such a proposal is to implement.

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