Utah legislators are facing a serious tax revolt at a time of huge taxpayer-funded surpluses.
Before a packed hearing room during a September 19 meeting of the Joint Revenue and Taxation Interim Committee, state Sen. Curtis Bramble (R-Provo) told county assessors, “this is the strongest public sentiment that I have seen, not only in chairing the Revenue and Taxation Committee … but in practice for 25 to 30 years as a CPA.”
No one expected a tax revolt. During 2007’s 45-day legislative session, lawmakers had substantially increased state spending on popular programs for the third year in a row, cut the state’s income tax, and removed a portion of the state’s sales tax on food.
Property Taxes Soar
During the spring of 2007, however, school districts, cities, counties, and other local taxing entities throughout the state approved large property tax increases. At the same time, assessors were increasing property valuations at an unprecedented rate. The combination of exploding valuations and property tax rate increases resulted in a statewide outcry from taxpayers.
When confronted by angry taxpayers, local officials justified higher taxes by arguing they were mandated by the state legislature or were needed to obtain state matching funds.
In an August 15 op-ed in the Ogden Standard Examiner, CitizensForTaxFairness.org, a grassroots citizens group, observed state legislators had taken a “Pontius Pilate” approach to taxes by encouraging local taxing authorities to raise taxes and then washing their hands of responsibility when the increases were implemented.
State Officials Blamed
Anger at state officials continued through the fall. On November 2 the Deseret Morning News quoted Taylorsville Mayor Russ Wall as saying, “I still think that we as a county, as local governments, are being used by the state legislature to raise taxes on our citizens, and that they in turn want to push the button on where those funds are spent.”
It wasn’t long before what had originally started out as a tax revolt against local taxing entities moved to the halls of the state legislature. Citizens are now demanding their legislators take immediate action to fix what they see as a badly flawed property tax system, and local officials are pressing legislators to stop shifting the responsibility for tax increases to them.
Among the reform proposals citizens have recommended:
- rollback of tax increases;
- redefining how property values are determined by using acquisition value instead of market value;
- requiring voter approval of property tax increases by a double majority (voter turnout by a majority of registered voters, with a majority of those voting approving the increase);
- shifting public education, which collects more than 60 percent of property taxes, to another funding source; and
- strengthening Utah’s Truth-in-Taxation program so it more effectively controls both taxes and spending.
Legislators who just months ago were looking forward to an uneventful legislative session and favorable reelection environment are now faced with the urgent need to enact legislation that responds to their constituents’ demands and pacifies angry local elected officials.
Taxpayer Groups Arise
New taxpayer groups have sprung up around the state and have formed a coalition to develop and promote taxpayer-friendly legislation. These groups are also making contingency plans for the 2008 elections in case incumbents fail to pass meaningful legislation.
If legislators fail to address the public’s concerns by the time the 2008 legislative session ends on March 5, the taxpayer groups promise to make it a difficult election year for incumbents.
Ronald W. Mortensen ([email protected]) is a retired Foreign Service Officer and co-founder of CitizensForTaxFairness.org.