Statewide property tax revenues are expected to reach $1.61 billion in 2002, an increase of $65 million over 2001's revenues. This represents a 4.2 percent increase over the previous year's revenues and contrasts starkly with other sources of state and local government revenue. State sales tax revenue in FY2002 increased 0.2 percent compared to FY2001 while income tax collections decreased 5.3 percent.
The 2002 property tax estimate is based on adopted property for Utah's 634 taxing entities.
School districts will receive nearly two-thirds of the increase while cities and counties will receive 18 percent and 9 percent respectively. Special service districts will receive 8 percent of the increase. School district property tax revenues will increase 5.7 percent while cities, counties, and special service districts will experience increases of 5.6 percent, 2.2 percent, and 3.8 percent respectively.
The large increase in school district property tax revenues can be attributed to property tax increases by nearly half of Utah's school districts, with Provo leading the way at 16 percent.
The proportion of property tax revenue going to each type of taxing entity changed slightly in 2002. School districts will receive 53.9 percent in 2002, up from 53.5 percent in 2001. The portion received by counties decreased from 19.8 percent to 19.3 percent while cities and special service districts remained virtually unchanged at 15.6 percent and 11.1 percent respectively.
Valuation-Weighted Average Rates
Average property tax rates for 2002 continue to range dramatically among counties. A valuation-weighted average tax rate is determined by dividing the total property taxes charged by all tax entities within a county by the county's total assessed valuation. Although property tax levies may vary within each county, the average tax rate provides a mid-range estimate of the county's total tax rate, including the county, school district, city, and special service district levies.
Statewide, the valuation-weighted average is 0.0126 (or 1.26 percent), virtually unchanged from 2001. The statewide average is significantly impacted by Salt Lake County, which has 42 percent of the state's property valuation. Excluding Salt Lake County, the statewide average decreases 10 percent to 0.011315. Salt Lake County's average rate is 27 percent higher than the effective average for the state's 28 other counties and is significantly impacted by high tax rate entities like Salt Lake City and Jordan School District. The only other urban county to have a comparatively high property tax rate is Weber County whose rates are adversely impacted by Ogden City, second only to Salt Lake City among major cities in Utah.
Wayne County continues to have the lowest average at .006282, 50 percent below the state average. San Juan County, which has been experiencing a declining property tax base, reclaims from Emery County the position of the state's highest average.
2002 Effective Combined Tax Rates
In addition to reviewing county effective tax rates, your Taxpayers Association annually compares the tax rates for cities, counties, and school districts. In order to reward financial prudence and indicate areas of concern with property taxes, the Taxpayers Association is listing "The Best and the Worst of the Property Tax".
Several factors may significantly impact whether an entity's tax rate is high or low. Counties with low property tax bases, which may be due to low property values or low population bases, need to provide the same services as counties with high property tax bases. However, a high tax base does not guarantee a low tax rate. Salt Lake City, with its highly valued downtown properties, has the highest property tax rate of any city in the state (Moroni City officials tried to displace Salt Lake as the city with the highest rate, but taxpayer indignation convinced city officials otherwise). Emery County, whose tax base benefits from the presence of large power plants, has the fourth highest average tax rate.
Other factors impact average property tax rates, especially at the city level. Most urban cities impose a municipal utility franchise fee while many rural towns do not. Cities with municipal power systems frequently have lower tax rates because cities do not pay property, sales, or income taxes on their power systems which allows the cities to operate the power systems at a profit.
These profits are then used to fund city government which allows property taxes to be maintained at a lower rate.
School District Rates
The statewide valuation-weighted average property tax rate for school districts was 0.006800. Property tax rates among Utah's 40 school districts vary wildly. Tintic's rate, the highest for any school district in Utah, is 108 percent higher than Daggett's, the lowest in the state.
Districts with low assessed valuations per student, like Tintic, frequently have the highest property tax rates. Suburban districts experiencing high growth like Jordan, Tooele, and Nebo also typically have higher tax rates.
However, a couple of districts buck the trend. A handful of districts with low assessed valuations per student had local school district tax rates (excluding the basic levy) that were lower than the state average. Weber's valuation per student is 37 percent below the state average, but its local school district tax rate is also 18 percent below the state average. North Sanpete's valuation per student is 36 percent below the state average while its local school district tax rate is 28 percent below the state rate.
At the other end of the spectrum, Emery's rate is 4 percent below the state average, but its valuation per student is 121 percent above the state average. Wasatch's valuation per student is 64 percent above the state average, but its local school district tax rate is only 10 percent below the state average.
City Rates (30 largest cities)
Salt Lake City, despite having a large tax base, continues to have the highest rate of all Utah cities at 0.005267, 102 percent higher than the state average. Bountiful has the lowest rate at 0.001216, 53 percent below the state average.
County Government Rates
Emery County, despite having a large tax base, maintains it position of having the highest tax rate of all Utah county governments. Emery's rate, 0.004908, is double the state average for counties. Wayne County maintains the state's lowest county government rate, which is 50 percent below the state average. Of Utah's urban counties, Utah County had the state's lowest rate at 0.001382.
Information from The Utah Taxpayer.