City Council Corner
Property taxes, property valuation and city revenue
By Mayor Kelvyn Cullimore, Jr.
Recently you should have received your property tax notice for 2014. This notice has two important sections. The first is entitled “Notice of Tax Changes.” In this section, the Salt Lake County Auditor itemizes the taxes levied against your real property and the entity that is imposing the tax. The most important parts of this section are the columns that compare the new taxes for 2014 to the taxes levied in 2013.
The taxes from year to year should be identical unless one of two things changes. The first thing to look for is whether there is an entry in the columns entitled “If 2014 Increase.” An entry in these columns shows the dollar change and the percentage by which that entity is raising their tax levy on your property. Follow the line to the right and it will tell you when a mandatory public hearing is being held by the taxing entity to receive comments from the public relative to the proposed tax increase. This is your opportunity to be heard if you oppose this tax increase. You can also write to the elected officials managing the entity raising taxes.
If there is no entry in the columns entitled “If 2014 Increase,” and the tax levied by a taxing authority in 2014 is higher or lower than in 2013, it means the county assessor has changed the valuation of your property. This is the second reason why your property tax assessment may have changed from 2013. To confirm this, look at the section of your tax notice entitled “Notice of Property Valuation.” This is the second most important part of the notice you have received. That section will show the 2014 Market Value and compare it to the 2013 Market Value. It also shows the Taxable Value, which is 55 percent of the total Market Value. Under Utah law, 45 percent of the value of a primary residence is exempt from property tax. However, any change in the market valuation will be a contributing factor to an increase (and sometimes a decrease) in your assessed property taxes.
It is possible that you may see a change in the market valuation of your property and not see any corresponding change in the taxes assessed. That is because Utah’s “truth in taxation” laws require every county to certify that the rate set by any taxing authority in that county is calculated to yield the exact same tax revenue for that taxing authority as the year before - after adjusting for inflation. In other words, if your tax from a particular entity was $1000 in 2013 and your property value increased by 10% in 2014, the new certified tax rate approved by the county would be reduced so that when it is applied to the new valuation it still yields the same $1000 assessment in 2014 as was assessed in 2013. Therefore, if your taxes generally went up in 2014, it is because the valuation on your home exceeded the average inflation for your area. Likewise, if your taxes generally decreased it is because your valuation did not keep pace with the inflationary average for your area.
If you feel that the valuation of your property is overstated, you have the right to appeal that valuation to the county auditor. However, any appeal must be filed before September 15, 2014.
So, to review, if your taxes increased from 2013 to 2014, it is either because a taxing entity raised the tax levy on your property above the approved certified rate set by the county, or it is because the valuation of your home increased by a greater percentage than was assumed for your area.
This year, Cottonwood Heights residents will notice that the line itemizing the Jordan School District Old Debt Service declined this year over last year because Canyons District, in collaboration with Jordan District, refinanced the debt at a lower rate, thus saving taxpayers money.
On my tax notice this year, approximately 50 percent of the taxes were assessed by school districts. About 24 percent of the levied property tax relates to Salt Lake County services. Fifteen percent of the assessed taxes are levied by the city of Cottonwood Heights. The remaining 11 percent are small taxing entities such as the Mosquito Abatement District, the Cottonwood Heights Parks and Recreation Service Area (which is a separate entity from the city that operates the Cottonwood Heights Rec Center and some area parks), Cottonwood Improvement District (sewer) and Central Utah Water Conservancy District.
With that 15 percent of your property tax, the city is able to provide you with fire protection, police services, emergency medical services, animal control and code enforcement, street repair and maintenance, snow removal, infrastructure support, parks and trails, street lighting, storm drain systems, planning and zoning services, business licensing, economic development support, and community events like Butlerville Days, just to name a few of the services provided.
The city of Cottonwood Heights is now in its tenth year of existence. During the last decade the city has never raised its property tax rate above the certified rate determined by Salt Lake County. We collect approximately $6 million each year in property tax. That number has not deviated materially from the first year we were a city. We are pleased that in our first 10 years we have not added any new tax burdens nor have we increased property taxes despite some pretty lean times during the recessionary years.
Only in 2015 are we expected to return to the same level of sales tax revenue we enjoyed in 2007. While it may not be possible to continue to provide the same level of service in the next 10 years without some additional sources of revenue, we will work hard to continue to manage the city in the same fiscally responsible way we have in the past.
We appreciate the taxes that you pay to support the municipal services we provide. We want you to know that we respect the stewardship we have been given to manage your tax dollars wisely in providing these municipal services.