Tag: certified tax rate

taxes - woman studying sheets of numbers

Straight Talk About Taxes

11/09/2023 / David Rodeback

If you were at the October 16 American Fork City Council candidate debate or listened to the audio or watched the video, you might have wished for some detailed background about how property taxes work. Here I’ll give you that background as concisely as I can, then say a few words about the candidates with respect to these issues.

(My other responses to what I heard at that debate are in the previous post. It’s about twice as long as this one.)

This post is heavy on information, for those of who seek only that here, but the closer we get to the end, the more you’ll get my opinions.

AF City Council Interviews: City Finances and Inflation

05/31/2023 / David Rodeback

I asked members of the American Fork City Council for their thoughts about the City’s financial condition. I had a particularly detailed conversation with Councilman Shelton, who has professional expertise in financial matters, about the effects of inflation on City finances.

City Finances and the Fund Balance

State law requires municipalities to keep a minimum cash reserve of 5% of the current fiscal year’s budgeted revenue. Until 2021 the maximum allowed reserve was 25%; now it’s 35%. (See Utah Code 10-6-116.)

One significant point of pride among all five council members is that, over the past several years, the City has built its reserve from below 10% to the maximum allowed by law, 35% — and the intention is to keep it there.

This is not just a rainy day fund, Councilwoman Staci Carroll explained. It has allowed the City to be opportunistic — for example, in acquiring a large piece of land for a planned regional park south of the freeway.

Councilman Ryan Hunter said, “We’re as strong as we’ve ever been, financially.”

American Fork Candidates Q&A: Part 3 – Quick Responses on Nine Issues

08/07/2017 / David Rodeback

I’m combining mayoral and city council candidates’ responses to this set of questions, because so far only one of the former and two of the latter have responded with answers. I’ll publish more if and when I receive them.

Perhaps I ask too much of candidates, sending them all these questions and asking them to respond. Life is busy enough, and campaigning makes it more so, for those who actually do it.

However, I keep thinking that it’s a decent test — not a perfect one — of candidates’ inclination and ability to communicate, even when they’re busy — which seems to be an important characteristic of their service, if we elect them.

But onward. In this set of questions, I asked the candidates to respond quickly — in seven words or less — to a list of issues. My exact instructions were (with examples omitted): Respond to the following issues in seven words or less. . . . Leave some of them blank, if you wish.

Those who responded caught the spirit of it. Please note that I don’t expect informed profundity on every issue; you probably shouldn’t either. But it’s good to see how they think. Continue reading

American Fork Property Tax Rates Have Decreased 3 Years in a Row

10/30/2015 / David Rodeback

This infographic very nearly speaks for itself. But a few notes, if you please.

One candidate is out there saying that our property tax rates just keep going up, year after year. This is not the case.

It’s true that someone’s property taxes can go up even if the City’s property tax rate goes down — if the assessed value of the property increases, or if another taxing entity, such as the Alpine School District, increases its rate.

The calculation for primary (first) residences is: multiply the rate by the assessed value of the property, then discount 45 percent. That’s the annual tax on that property.

Here’s your extra credit for the day. Some candidates can’t explain this, but maybe that’s okay, because it’s a little messed up.

The City’s certified tax rate (CTR) is set according to state law. A given year’s rate is the answer to this question: Looking at the same set of properties that was taxed last year, what rate will bring in the same number of dollars (perversely, not adjusted for inflation) as last year, given current valuations?

If the City lowers that rate, it’s a tax cut. If they raise that rate, it’s a tax increase, with special requirements for public notice and such. This is true even if the “increase” produces a rate lower than last year’s, or vice versa. So we sometimes see “increases” in which this year’s rate is lower than last year’s, and we occasionally see “tax cuts” in which the resulting rate is higher than last year’s.

The Utah Legislature calls this “Truth in Taxation,” and yes, it can be Orwellian. The long-term effect in practice is to starve municipal governments of funds, because to raise the rate even slightly, just enough to keep revenues equal in real (inflation-adjusted) dollars — and even if the rate ends up lower than last year’s — is a “tax increase.” And we all know tax increases, real or imagined, are dicey politics for incumbents.

Based on what I’ve heard from the legislation’s authors, this slow strangulation was an intended consequence. It’s clever, and it’s destructive.

Speaking of politics, why do you suppose a challenger running for City office would misreport the facts, saying repeatedly that our property tax rates have increased, when they clearly haven’t?

Want to make a difference? Share this. Before Tuesday. Help others learn before they vote.

Here is a longer discussion of certified tax rates, on the off chance that you haven’t had enough already.