Property Taxes

Yes and no. Utah state property tax law is set up in a way that taxing entities (cities, counties, school districts, etc.) receive the same amount of revenue year to year regardless of property values rising or falling. Each year, the State uses property value data and tax revenue targets to calculate tax rates so that, on average, residents don’t pay a different dollar amount year to year. If property values rise, the tax rate then decreases. The overall revenue that the city receives stays the same, except when there is new growth (which regularly occurs in Herriman). When there’s new growth, the new homes are taxed at the same rate as existing homes, so revenue increases alongside the growth. But the rate stays the same.

However, if a taxing entity needs more revenue than population growth alone is providing (such as for inflation), they can choose to raise the property tax rate in order to reach a higher revenue amount.

The state of Utah is somewhat unique in how it sets property tax rates. In many states, property taxes are a simple percentage, and the amount paid every year is directly tied to how much properties are worth—if property values go up, then taxes paid go up. In Utah, however, taxes are designed to stay the same year to year, regardless if property values go up or down. How does it work?

Taxing authorities submit a property tax revenue target to the State of Utah. County Assessors determine individual property values. The State uses the revenue target and the general trend of property values (information provided by counties) to calculate the appropriate rate to charge in taxes to achieve the target revenue during the year. This State-calculated rate is called the certified rate. Since property values change each year (usually increasing), tax rates are re-calculated every year. In a normal year, as long as a taxing authority doesn’t change their target revenue, the certified rate will stay the same or decrease from the previous year to offset rising property values. However, if a taxing authority wants to increase their target revenue, it will likely cause the State’s calculated certified rate to be higher than the previous year. If the rate is higher, then official notices must be mailed to residents and the taxing authority must hold a public Truth-in-Taxation hearing.

Once the final rate has been approved, property taxes will be paid during the following calendar year. For efficiency, taxes are paid to one central entity, the county. The county then disburses the tax revenue to the various taxing authorities throughout the year based on their rates. Those taxing entities and their governing boards may then expend the money based on their approved budgets.

Centerville City has made consistent and frequent efforts over the last several years to trim its finances to what the City Council feels is most important. The city also seeks other revenue sources such as state and federal grants to help reduce tax increases. Costs have been cut where available, and any contracts or purchases are analyzed and scrutinized. However, inflation of costs for materials, supplies, vehicles, and personnel continues to rise, so a revenue adjustment is crucial to maintain a quality level of service.