ST. GEORGE – The Washington County School Board is proposing another tax hike which, if approved, will be the third tax increase by the district in three years – which doesn’t include a $185 million construction bond passed in 2013.
A Truth-in-Taxation hearing for the tax hike is set for Tuesday at 6 p.m. at the school district administration building.
The proposed tax hike would increase the district’s portion of property taxes by 1.85 percent and bring in $713,000. The school district raised taxes 3 percent in 2015 and 6 percent in 2014.
“What we try to do is, we try to do small (tax) increases so that we can … keep up with inflation as it goes up so that we’re not suffering and we can hire the staff members we need to hire,” school district spokesman Steve Dunham said.
School board president Laura Hesson said the board wouldn’t be raising taxes if they didn’t feel it was needed.
“With the increased enrollment and the need for more teachers and more schools and that kind of thing we just feel like the tax increase – even though we don’t want to increase taxes – we feel like that’s the option that we need to do to be able to have it so that the schools and students have what they need,” Hesson said.
If enacted, the increase would raise property taxes on an average home – valued at $245,197 – by $7.96 each year. Businesses valued at the same amount would see an increase of $14.47 per year.
Property tax increases are cumulative and once an increase is approved it is figured into the tax rate indefinitely.
Excluding debt service, the school district’s portion of taxes on a $245,197 residence would increase from $622.10 to $630.06; for a business valued at $245,197, taxes would increase from $1,131.09 to $1,145.56, according to information from the school district.
Because the district’s bond payments decreased this year, property owners would have seen a decrease on their tax bill this year, school board President Laura Hesson said.
“If we’re doing this small increase, it’s still actually, for most people, going to be less than they paid last year,” she said. “As we looked at it this year, the overall tax rate is going down,” Hesson said.
The board is not planning to increase taxes every year, Hesson said, but chose to raise taxes this year because the debt repayment portion of taxes dropped.
Dunham, however, said taxpayer feedback has shown that smaller, more frequent tax increases are preferred.
In addition to the tax increase, the district will receive $4.5 million in new revenue from taxes on new growth – newly built homes and businesses.
“At the last bond election … we told the taxpayers that based upon projections, because of growth we’re facing in the district, even though we’re taking out more money we’ll be able to lower the tax payment. And that is coming true, because of growth we’re able to lower the tax rate for bond payments from .0027 to .0026,” Dunham said, which translates to about 2.8 percent of the overall debt service level.
However, Washington County Clerk/Auditor Kim Hafen said the total amount taxpayers pay to the school district would not have gone down without the school district’s proposed tax increase.
- In 2015, the owner of an average $231,379 primary residence paid $953.80 to the school district, a figure which includes debt service; the owner of a second home or business of the same value paid $1,734.19, Hafen said.
- In 2016, without the proposed tax increase, Hafen said the owner of the average $245,197 primary residence would have paid $972.73; second homes and businesses of the same value would have paid. $1,768.61.
- With the tax hike, that same owner will pay $980.69, Hafen said, and owners of second homes and businesses valued at $245,197 will pay $1,783.07.
Washington County School District Business Administrator Brent Bills said the reason for the discrepancy is that the school district’s portion of property taxes is broken down into four categories: a voted levy passed around 2006, a local levy set by the school board, a capital levy and a debt service levy, which is for bonds approved by voters.
The debt service levy is automatically adjusted as needed to pay off the bonds. The other three categories cannot be increased without holding a Truth-in-Taxation hearing, like the one scheduled for Tuesday.
The debt service levy will drop from .0027 in 2015 to .0026 in 2016, Bills said, because of revenue received from new growth.
Spending per student doubled
At the truth-in-taxation hearing for last year’s tax hike, Utah Taxpayers Association President Sen. Howard Stephenson, R-Draper, spoke against the tax hike. Utah has doubled its spending per student to twice the level it was in 1970, after adjustment for inflation, he said.
Stephenson owns a second home in Washington County and also serves as chair of the Utah Legislature’s Public Education Appropriations Subcommittee.
Legislators are doing everything they can to support education, Stephenson said at the 2015 hearing. “I think this idea of adding a tax every year is just insensitive to those who have supported you the most.”
The Taxpayers Association did not respond to requests for comments about this year’s school district tax increase.
How it works
Cities, the school district, and other government entities such as Washington County, the Mosquito Abatement District, the Water Conservancy District and others all have the power to collect property taxes. To increase taxes, an entity must hold a hearing to take public comment, but is not legally bound by comments received.
By law, taxing entities are given a certified tax rate each year which produces the same total amount from property taxes as the previous year, plus any funds generated by new growth such as newly built homes or businesses. Each year, the previous year’s new growth figures become part of the new base valuation.
The Assessor’s office calculates the value of all property in the county, and passes that information to the Clerk/Auditor, who, with the help of the Utah State Tax Commission, establishes a certified rate. The certified rate allows a taxing entity to receive the same revenue as the previous year, but no more.
Therefore, the tax rate will naturally fluctuate based on the total assessment of property in the county, Hafen said in an earlier interview.
“If the assessed value of the county has gone up, the tax rate will go down, because the entity will get the same amount of revenue as the previous year. If the assessment goes down, the tax rate will go up automatically and create the same amount of revenue.”
However, if an entity wants more revenue than they would receive through the certified tax rate, it must go through a Truth-in-Taxation process which includes notices to taxpayers, publicly posted notices and a public hearing, Hafen said.
School districts in Utah are funded through both property and income taxes. Property taxes are collected by the county, while income taxes are collected and distributed by the state.
A Truth-in-Taxation hearing on the proposed tax increase will be held Tuesday, Aug. 9, at 6 p.m. in the Washington County School District administration building, 121 W. Tabernacle Street in St. George. All concerned citizens are invited to the hearing.
The school board will decide on the matter after the hearing, Bills said.
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