To continue to provide essential services as well as maintain and improve our city, Centerville City is proposing to increase revenue through a property tax increase of 32.26%.
The cost of providing essential services and infrastructure has increased significantly. As the City's purchasing power has declined, more funding is needed to keep up with rising inflation and to maintain the City's current service levels.
Property tax dollars are used to maintain critical infrastructure, provide Police and Fire services, and maintain parks and the Cemetery. To continue to provide current services levels, the City is seeking additional funds from property taxes through a process called Truth-In-Taxation.
As you may have noticed on your tax bill, there are many taxing entities. Each of these individual entities are responsible for setting their own tax levy.
It is important to note that the proposed increase will only affect the City's portion of the tax bill; not the total amount.
Only 10% of a Centerville City resident's total tax liability is paid directly to the City.
HOW DO PROPERTY TAXES WORK IN UTAH?
Property tax rates in Utah are based on the actual amount of tax dollars collected the prior year. State law limits the City to receiving the same dollar amount in property taxes as it received the prior year—except for taxes from new development—unless the City Council enacts the “Truth-in-Taxation” process. Therefore, as property values go up, the “Certified Tax Rate” goes down.
HOW WILL THE TAX INCREASE AFFECT ME?
The average home value in Centerville is $546,000. (Residential homes receive a 45% discount, making the taxable value $300,300.)
The average home currently pays $283.18 in Centerville City property taxes.
The proposed 32.26% increase will raise the City portion of the property tax bill on an average home by $7.61/month.
ARE PROPERTY TAXES AFFECTED BY INFLATION?
No. The City receives the same dollar amount as the prior year. When home values rise, the tax rate decreases. To adjust property taxes, the City must initiate a public hearing process called Truth-in-Taxation and decide whether the adjustment is necessary.
IF PROPERTY TAXES ARE NOT AFFECTED BY INFLATION, WHY HAVE MY PROPERTY TAXES GONE UP IF THE CITY HASN’T RAISED THEM?
There are two possible reasons for the change. The first is that another taxing entity (school district, Davis County, etc.) has gone through the Truth-in-Taxation process and raised their rates on one or more years which would increase your taxes. The second is that your property has increased in value more than other properties. When the property value of the City increases, the tax rate automatically decreases which gives the City the same revenue from year to year. However, if your property increases in value at a rate higher than the tax rate decreased then you will see a tax increase. The City will not see that increase because another property’s value would have been decreased or become tax exempt which would mean a tax decrease, and result in no change to City revenue.