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Tax-law Changes Could Give Communities Unexpected Windfalls

Tax-law Changes Could Give Communities Unexpected Windfalls

Posted - Jun. 22, 2004 at 7:49 a.m.



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SALT LAKE CITY (AP) -- Changes in state laws on calculating property taxes could give some communities a large, unexpected, one-time windfall.

Taxing units are in the process of setting budgets right now and it's not known how many of the more than 600 units will go for the windfalls, which could come from tax hikes of 2 to 8 percent.

"There's still a lot of confusion surrounding the whole thing," said Brent Gardner, executive director of the Utah Association of Counties.

In a meeting Monday, Davis County Clerk/Auditor Steve Rawlings suggested that all entities that would benefit adopt smaller rates that would increase property taxes by 2.1 percent.

"I want to let you know I feel strongly, personally, that is the moral and prudent thing to do," said Davis County Treasurer Mark Altom.

Chad Vanderlinden of the business-backed Utah Taxpayers Association said, "It'll be interesting to see where the other counties line up on this. Davis County is doing the right thing."

Some jurisdictions already have rejected the new state rate and the money it would bring to their coffers.

"We didn't take it because we're committed to not raising taxes, whether it's through the back door or the front," Salt Lake County Council Chairman Steve Harmsen said.

Salt Lake City has adopted the state-provided rate and city officials who anticipate property owners will pay about 5.6 percent more than last year.

Rep. Ann Hardy, R-Bountiful, who sponsored one of the bills affecting the formula, said she did not intend to "create a windfall, but to give the taxing entities stable numbers to budget with from year to year."

Hardy said she only wanted to stop the downward trend of tax revenue collected by government entities. Communities with stagnant growth were collecting the same amount of revenue but faced rising service costs.

Some municipal officials worry that turning down the new rate could come back to haunt them.

"Where we have been falling behind a little bit each year, this could be viewed not so much as a windfall but recapturing what we've lost over the years," said Centerville finance director Blaine Lutz.

"If we are the only cities and county in the state that don't take advantage of this increase and next year there is some widespread movement in the Legislature that it (the formula) needs to be corrected again, we would lose out. That's the risk they are asking us to take."

(Copyright 2004 by The Associated Press. All Rights Reserved.)

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