Learn BEFORE you vote. (Not an official website of American Fork City.)

Tag: property tax

Straight Talk About Taxes

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.

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AF City Council Interviews: City Finances and Inflation

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.”

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

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.

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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.

They Want You to Think American Fork Has the Highest Property Tax Rate

What Utah Football Has to Do with It

Suppose you’re a University of Utah football fan (as I am, when they aren’t playing BYU, and I’m sad about the USC thing last week). But your grandfather is a died-in-the wool Cougar. You know the type. In his mind, it is a holy war, and you don’t remember the last time he was willing to concede that the Utes made a good play or got a good win. When the Utes beat the Cougars, as often happens, he blames the referees. If he cannot find the slightest cause to blame them for enforcing the rules unevenly or ignoring the rules when it’s to Utah’s advantage, he complains that the rules themselves are stupid and skewed, and blames the refs for enforcing bad rules.

Suppose that in a small fit of hubris and wrath, he said to you, “If the Utes are ever ranked first in the polls, I’ll give you $25,000.”

Fortunately, his eyesight is failing. So when the Utes were ranked #4 the other week, you dropped by (as you often do, because you’re a good, devoted grandchild). This time, you said, “Grandpa, I’m going to read to you from the college football poll in order, as usual. By the way, BYU got a few votes, but didn’t make the top 25. As always, I’ll start with the last of the ten on my list and work up, because I know you like the suspense.”

Conveniently — and so you couldn’t accused of lying — you had typed up a list with ten teams in order, starting with Utah at #4. You left off the top three, but you were careful to get the next ten in the right order, because accuracy matters. You started reading at the bottom, as you said, and you didn’t give their numerical rankings. You left him thinking that Utah was ranked #1.

“I guess I’d better write you a check,” he said, because his eyes are failing, but his memory’s fine. “Better yet, you write the check, and I’ll sign it.”

Grand Larceny

You would never try to put the wrong amount on the check — say, $125,000 — even though he’ll never notice. After all, you balance his checkbook too, and there’s plenty of money in his accounts. You could probably get away with it — and if he caught you, you could say it was a mistake, and he’d likely believe you. But you would never do any of that. It would be immoral. It would be criminal.

Come to think of it, you would never deceive Grandpa with bad data, so he’d give you $25,000 on a false pretense. Not only would that also be a felony. It would be piling a sin on top of a sin. (The one on the bottom is loving money so much you’re willing to deceive people to get more of it.)

property tax ratesHere’s my question. If you wouldn’t do any of those things, why in the world would you publish a flier with a graphic showing that American Fork has the highest property tax rate among Utah County cities, when three cities have higher rates?

You could protest that all the numbers you put in the graph are true. And you could point out that the graph would be unreadably crowded if it showed all 25 Utah cities. So you had to leave them out. And you could protest that you never actually said that American Fork’s rate was the highest. And all of that would be true.

Do you really expect me to believe that you left out all the cities with higher tax rates just for the sake of readability? It looks like you’re trying to fool the voters, tricking them with partial truths so they’ll give you political power. (I’m sure it’s for their own good.)

You might argue, even if you did skew the visual results, the higher point you’re making is God’s Honest Truth: our taxes are too high. So that justifies taking some liberties with your graphics.

So I guess I have two more questions.

First, if it’s God’s Honest Truth, why do you have to deceive people so they’ll agree with you?

Second, would you ever trust someone like you with political power, control over tens of millions of dollars of tax revenues, and your freedom?

So You’re Not Really One of Those People

Gentle reader, I assume you’re not one them. So what can you do to help? Post the graphic below (or this one) on Facebook or somewhere, or e-mail it to your friends and neighbors. Talk to your friends, in person and on social media. Tell them what you know. Some of them will listen. And if you want the raw data, it’s here at Utah.gov: 2015 Utah Tax Areas with Tax Rates.

Learn before you vote.

Meet the American Fork City Council Candidates (Parts 9-12)

On Saturday morning State Auditor John Dougall moderated a meet-the-candidates event at American Fork Hospital. It was part of their Pancakes and Politics series, which is sponsored by the American Fork Chamber of Commerce.

Kevin Barnes

Kevin Barnes

No one in the area has more credibility in the moderator’s role than John Dougall. And the free breakfast was good too. About 40 people attended, not counting the candidates and the moderator. The audience was noticeably older than Wednesday evening’s.

The format was a bit different from Wednesday evening, and some of the questions seemed a bit redundant, but there was more discussion of some key issues, as well as some treatment of issues which didn’t arise on Wednesday evening.

All four candidates were there: incumbents Brad Frost and Rob Shelton, and challengers Allen Simpson and Kevin Barnes.

My audio recording of this event is not of professional quality (that’s no surprise), and there’s a fair amount of background noise. But it’s easy to follow. I’ve broken it up into four segments of about 20 minutes each. For each segment, I’ll list the topics and the order in which the candidates responded.

First Segment

Audio link: 2015_Saturday_1

Brad Frost

Councilman Brad Frost

Opening Statements (3 minutes each; Frost – Shelton – Simpson – Barnes)

  • Brad Frost: “Let me see the facts, and I will make a decision.”
  • Robert Shelton: “We were able to find over the last three years $1.8 million in budget cuts. . . . We were able to do more with less.”
  • Allen Simpson: “I’ve been successful at leading teams of people who were not used to following.”
  • Kevin Barnes: “I’m not mad at anybody. I’m not after anybody’s throat. I just want to serve.”

Questions (one-minute responses):

  • water rates (Shelton – Simpson – Barnes – Frost)
  • experience (Simpson – Barnes – Frost – Shelton)
  • more experience (Barnes – Frost – Shelton – Simpson)

Second Segment

Audio link: 2015_Saturday_2

Questions:

  • property and sales taxes, tax cuts (Frost – Shelton – Simpson – Barnes)
  • developers vs. residents (Shelton – Simpson – Barnes – Frost)
  • why running, what do you what to accomplish (Simpson – Barnes – Frost – Shelton)
  • top two priorities for City’s limited resources (Barnes – Frost – Shelton – Simpson)

Third Segment

Allen Simpson

Allen Simpson

Audio link: 2015_Saturday_3

Questions:

  • police questioning of people who haven’t broken the law (Frost – Shelton – Simpson – Barnes)
  • the study saying American Fork is the 4th or 5th most-taxes city in Utah (Shelton – Simpson – Barnes – Frost)
  • areas of City government that need changes (Simpson – Barnes – Frost – Shelton)
  • roads (Barnes – Frost – Shelton – Simpson)

Fourth Segment

Rob Shelton

Councilman Rob Shelton

Audio link: 2015_Saturday_4

Questions:

  • building department (Frost – Shelton – Simpson – Barnes)
  • what to cut in the budget (Shelton – Simpson – Barnes – Frost)
  • off-street parking and snow removal (Simpson – Barnes – Frost – Shelton)

Closing Statements (two minutes each; Barnes – Frost – Shelton – Simpson)

You may also enjoy notes and audio from the Wednesday evening candidates event.