PROPERTY TAX FACTS
The City of North Salt Lake provides many services and amenities to residents and businesses which improve quality of life and provide a safe environment to live and work. Other services such as water, storm water, and solid waste utilities are funded directly through monthly utility rate revenues. Other services the City provides, including public safety, fire and emergency medical services, parks, streets and signs, sidewalks and snow removal, do not have direct funding sources. These services are primarily paid for with sales tax, property tax, road taxes, and other fines and user fees. Property taxes cover only a fraction of what the City needs in order to provide these valuable services. This year, the City of North Salt Lake will receive about $2,488,000 in general fund property tax revenue. To put this in perspective, public safety and fire protection expenditures are approximately $4,023,000 for the same fiscal period. Sales tax, grants, fines and user fees cover the remaining general fund costs. EXPENDITURES BY PROGRAM
4,100,000
3,600,000
3,100,000
2,600,000
2,100,000
1,600,000
1,100,000
600,000
100,000
Many residents are uncertain how much of their property taxes go to their City. Many people think the entire amount they pay is collected by the City. In reality, property taxes are allocated to different entities including Davis School District and Davis County. Looking to the future, the City has identified a need for additional public safety officers and repair and replacement funding for parks, roads and public buildings. The City is proposing a 10% increase on the City portion of your property tax to fund these increased services. If the increase is approved, the City’s Fiscal Year 2016‐2017 approved budget will include an increase in property tax revenue in the amount of $248,800. The City of North Salt Lake has not increased property tax rates in over 20 years. How will this increase impact your property tax obligation? The average market value for tax purposes in the City of North Salt Lake is $302,000. A resident with this home value would see an increase of $24 per year. Also, City tax on a $302,000 business would increase $45 per year, or from $445 to $490. Your increased payment will enable the city to add two sworn police officer positions and fund needed repair and replacement of city parks, buildings, and other infrastructure. A public hearing for a proposed property tax increase will be held Aug. 8 at 7 p.m. at City Hall, 10 East Center St., North Salt Lake. UNDERSTANDING PROPERTY TAX Residents often have many questions about who they pay their taxes to, and how taxes are calculated. Davis County is responsible for collecting taxes for many different entities, including school districts, cities, sewer districts, mosquito abatement districts, water conservancy districts, fire district, law enforcement districts, and other special improvement districts. The amount you pay is based on the budgets of the different taxing entities, as adopted by their governing bodies. Who Receives the Property Taxes I Pay? Depending upon the location of a property, different property taxes may apply, such as special service districts for recreation centers or other improvements. Regardless, in North Salt Lake, the Davis School District receives the largest portion of your property taxes, typically over 64 percent of the total amount collected, followed by Davis County at 14 percent. On average, City of North Salt Lake receives only about 12 percent of property tax funds collected. HOW YOUR PROPERTY TAX DOLLARS ARE DISTRIBUTED
Average Home Value in North Salt Lake City
Home Value
Residential Exemption
Taxable Value
Total Property Tax
Total Tax
$ 302,000
135,900
$ 166,100
1.2623%
$ 2,097
Property Tax Distribution by Entity
Davis County Schoool District
Davis County
City of North Salt Lake
County Library
South Davis Recreation District
South Davis Sewer Conservancy District
Weber Basin Water Conservancy District
Davis County Mosquito Abatement District
Total Tax
City 10% 2017 2017 Proposed Tax Proposed
Amount Increase
Rates
0.008125 $ 1,350
0.001779 295
0.001475 245
$269
0.000342 57
0.000306 51
0.000287 48
0.000187 31
0.000122 20
0.012623 $ 2,097
PROPOSED PROPERTY TAX CHANGE WILL RESULT IN AN ANUUAL INCREASE OF $24.41 FOR A PRIMARY RESIDENCE WITH A COUNTY ASSESSED VALUE OF $302,000
How is my Property's Value Assessed? The value of your home or business property is determined by the County Assessor, not the City or town you live in. Property values always fluctuate. The market itself drives property values and throughout the year, as homes sell, some areas go up in value, some go down, and others don't change at all. The Assessor uses this information to value each property. Some property values may change dramatically in a single year, while other property values may change little in a given year. The following year, the reverse may be true. Homeowners only pay taxes on 55% of the assessed value of their home. In the State of Utah there is a 45% exemption on primary residential properties. So, if the County Assessor determines that the value of a home is worth $200,000, and that home is the primary residence for someone, the owner would pay taxes on that property as if it were worth $110,000 (55 percent of the full value). Commercial properties and second homes are assessed taxes on 100 percent of the value. Why do my Property Taxes Change from Year to Year? There are a couple of things to keep in mind when considering how your property taxes might change from one year to the next. 1. There is no "cost‐of‐living" or inflation adjustment to the property tax. The amount of money the City receives from property taxes is fixed, regardless of inflation. 2. Unless a City holds a Truth in Taxation hearing and raises property taxes, they can only receive the same amount of property tax they received in the prior year, plus any increase from NEW development (additional property taxes from new homes or buildings added to the City). If the City wants to receive an increase in funds from property taxes, they must hold a Truth in Taxation Hearing. State law requires that if the City intends to increase property taxes a full page advertisement must be published in the newspaper and a public hearing must be held. The full page advertisement will state the impact, or estimated increase in property taxes that would be realized by the home owner. 3. Property taxes don't go up just because the value of your property goes up. State law requires that, all other things being equal, if a home's value goes up by 15 percent, the tax rate by the City (or any other taxing entity) be reduced by 15 percent, so that the homeowner pays the same amount of taxes as the previous year. Conversely, if property values drop by 15 percent in a given year, property tax rates increase by 15 percent so that again, the homeowner pays the same amount of taxes as the previous year. Additional factors which cause property taxes to fluctuate from year to year. A) First of all, as you see on the very first graph, the City is one of several entities which can charge a property tax. If taxes go up, one of the other entities may have raised taxes after a Truth in Taxation hearing. B)
Second, as mentioned earlier, property values are assessed county wide by the County Assessor. Also as mentioned earlier, the City is only allowed to receive property taxes in the same amount of revenue which they received the previous year, plus taxes on new growth. If property values go up, the rate goes down proportionately, and the amount the property owners pay stays the same. However, consider a scenario where property values on average increased by 15 percent, but in one part of the City they increase by 20 percent, and in another part of the City, they only increase by 10 percent. The property tax rate would drop by 15 percent (proportionate to the average property value increase). But the part of the City which had a 20 percent increase in property values would pay slightly more property taxes than the previous year. The portion of the City which had a property value increase of 10 percent would pay slightly less in property taxes than the year before. This same principle applies to all agencies, such as Davis County, Davis School District, and special districts. C)
Third, as some entities have bonds which were approved by voters and are paid for from property tax revenues, property taxes dedicated to the repayment of the bonds fluctuate as bond payments change from year to year. What is the Certified Tax Rate? Remember, the City receives the same amount in property taxes as they received the previous year (not counting new development). While the City sets the property tax rate as a base rate, the Davis County Auditor determines the "certified tax rate" based on the previous years assessed valuations across the entire City and the amount of property tax received. This "certified tax rate" will go up or down as needed to arrive at that "same amount of tax" figure ‐ the rate which will give the City the same amount of property taxes as the prior year. The only way the City can get more property taxes than allowed by the "certified tax rate" is to hold a Truth in Taxation hearing and make a case for a tax increase to the public.