Utah Property Taxes Discriminate. You may have been stunned if you've received your Washington County, Utah, annual property tax valuation bill. There are two issues I'm going to discuss in this article. Issue ONE...the ADDED tax showing on the bill they plan to vote on August 18th, 2022--please attend the meeting if you can--this should be voted against. Due to a prior commitment, I cannot make it to the City Council meeting on the 18th. Issue TWO...our broken property valuation system.
Property taxes are not uniform or fair. Essentially, they discriminate between neighborhoods and the sales activity within them. Utah is a non-disclosure state. Homeowners are not required to report how much they paid for their property. Occasionally, tax-paying homeowners get lucky, and the Assessor values the property for less than the sale price. But now I'm asking, WHY are we a non-disclosure state? WHY aren't property values based on what you paid? Why are our values determined by a city worker based only on the size and similarities of nearby homes?
There is an argument that if Utah becomes a disclosure state, it will encourage higher taxes, but it should be known that the Assessor already has access to our MLS, so our "secret data" isn't secret. I'm not sure who we are hiding it from...if not the Assessor.
Here is a property valuation example that would be applicable here in Washington County. Two different people purchase a home for $600,000. One person declared what they paid, and their valued assessment resulted nearly identical to their purchase price. The other buyer did NOT disclose the purchase price, and their assessed value resulted in $400,000. Two people paid the SAME purchase price, yet one person is paying $2,000 LESS in property tax for their home. Fair? For this example, the sellers originally purchased the homes for $200,000 (as did many neighbors). The sellers cashed out with a hefty profit, all the neighbors now receive increased valuation assessments, and one of the buyers is saving $2,000 (for now). Fair? The following year that owner gets reassessed and is SHOCKED to receive a $2,400 higher tax bill unexpectedly. His property taxes were impounded, and now his payments are going up by $200 a month to offset the taxes. This is substantial for anyone to receive, and many unsuspecting taxpayers will receive this considerable increase in 2022. Fair?
Tax increases should be CAPPED. How can any average person budget for our annual taxes when we have NO idea what the Assessor will value? My Little Valley (St George) neighborhood got walloped with insane increases, while another person in Ivins commented their taxes only went up $100. A necessary change is a percentage or monetary cap for taxes or valuations that can be increased (if needed). Rate caps are typical with anything else—even income taxes are predetermined. You know what bracket you'll be in—allowing a budget plan. Our property taxes offer no budgeting ability, which will not allow some residents to remain in their homes.
If you decide to appeal your value, the County instructs the owner to bring comparable sales, but how is that fair if you're not even selling? And why do we need to provide comparable sales from neighbors we had no part in their decision or transaction? And what about private party sales? We have no data on those sales. Sellers cashed out and left, and now remaining neighbors are taking it on the chin with limited data. Why not base property values on the value the homeowner ACTUALLY paid and then allow for a maximum capped percentage each year if values are increasing?
Our seniors can't afford unexpected increases. Just because they don't fall under the low-income level to qualify for the circuit breaker relief doesn't mean they can AFFORD to pay more. If one spouse dies—they are now living on even less income. We should not be forcing our residents to wonder how they age in place when they have no control over the values around them increasing.
The City owned Golf courses. According to the city report (https://www.sgcity.org/pdf/administration/citybudget/citybudget/2022-23recommendedbudget.pdf), Golf courses for 2022 showed expenses of $8 million. Revenue was $6,075,000. That means it costs $1.8 million to have the golf courses. That is a deficit! A LOSS! What if we didn't have that loss? Do you think law enforcement could do something with that $1.8 million? How about the $1.3 million allocated for the St George Golf Club clubhouse renovation, which is on the budget? How many of our taxpayers' golf? 5% or 10%? Why is the City involved in a business the taxpayers' fund AND lose money on? Why not sell the land and allow private businesses to make or lose money? We can sell with deed restrictions to ensure the land stays as it is.
Check out this budget photo on revenues and expenses (copied from the City budget link above)
It's interesting to note...the meeting on August 18th with the proposed tax increase (you know-- to pay for "police"). According to their memo, the proposed increase will add 27%. Total property tax revenue is $12,925,000. Of this amount, the city receives 11.8% (or $1,525,150) <Page 12 of the budget link above>, So it seems the proposed tax increase will add approximately $3,489,750. Maybe I'm wrong (it wasn't exactly clear how they pulled the 27%), but that's an interesting number looking at the "golf loss" figure above.
AUGUST 18th GOAL:
The City Council needs to vote NO on the August 18th additional tax increase. Remember that this issue differs from our property valuations issue, which likely needs to be handled at the state level. But we CAN do something.
We as a County need to redefine our tax plan. We must prioritize the budget based on our needs FIRST and THEN budget for our desires or goals. Placing the latter first and then charging an EXTRA tax for law enforcement is ridiculous. Law enforcement is a priority and should be treated first in the budget, not taxed as an afterthought.
Our property taxes being reassessed at the highest level of pricing we may ever see isn't fair. Many of us are paying taxes based on values we can't afford to purchase today. We are now LOCKED into this. Yes, prices will come down (we already see some decline), but our future taxes will not reduce. So, we are currently in the highest possible bracket—amid what may become a future crisis (recession or housing market decline). And STILL, the County needs MORE money (the Aug 18th meeting). What does that tell you? Our County is living beyond our means. We must trim the fat and plan better now.
We should have a proper audit completed by an independent auditor—not by a tax company here in town (conflict of interest).
We have many new residents (welcome to the area). While the taxes may seem lower than where you previously lived, we still need your help to prevent our taxes from becoming the same problem as where you left—demand responsible budgeting and accounting. Come to the meeting on August 18th, and make the council rethink their mismanaged budget. https://www.sgcity.org/notice/5310?fbclid=IwAR1FeuvFHI73fLOzkUpJZSsEkv7yzNq6WpODd2g04pV9a2J8Ed5DjbYvwlw
POSSIBLE SOLUTIONS and BRAINSTORMING for Property Valuation Issues:
-Taxes are based on what you paid for the property
-Capped yearly tax increases
-Transfer tax. Many states impose a tax when an owner is SELLING the home; this may help with fairness, so sellers are paying the higher taxes. Perhaps the basis is the difference between the assessed value and the amount the property sold. Or a specific percentage of the sale price.
--Property Tax increase freeze for seniors, teachers, law enforcement, medical
And finally, thank you to Council member Michelle Tanner for being the only member to stand up to this budget and tax issue. Many citizens have commented that we need to elect members that will help us, and she is the only one I have seen that seems to be questioning any of this. She speaks out, which isn't easy. She consistently points out concerns, and the City appears to be doing whatever possible to silence her. Why is that? We need people on the inside speaking the truth. Our city officials are NOT part of a confidential club, so why are we accepting the silence? Support our members who are trying to let us know what is going on.
What are your thoughts on this topic? I'd love to hear your input.
I am Paula Smith, Associate Broker with RealtyPath of St George. I have been a licensed, full-time real estate agent in Southern Utah since 2006. I have been selling residential real estate during all of the changes in the market and witnessing our St George area grow to become one of the fastest-growing cities in America. I keep my finger on the pulse, paying attention to market conditions.