Property Taxes, Part 3: Truth-in-Taxation Results
We’ve discussed the theory and mechanics behind Truth-in-Taxation in parts 1 and 2. Now we’ll talk about the results.
Property tax revenue growth before and after Truth-in-Taxation
In the six years (1980 to 1986) prior to Truth-in-Taxation’s enactment, property tax revenue grew at a 10.8% annualized rate even though combined inflation and population growth was about 7%
In the twenty years since Truth-in-Taxation, property tax revenues have grown at a 5.4% rate, equal to the combined inflation and population growth rate of 5.4%.
During that time period, there were three property tax cuts unrelated to Truth-in-Taxation – two reductions to the statewide basic levy for education and a reduction in county property taxes in exchange for a sales tax increase. All of these reductions occurred prior to 2000 so comparing property tax growth since 2000 would provide a more accurate impact of Truth-in-Taxation. Since 2000, property tax revenues have grown at about 5.9% annually, and combined inflation and population growth has been slightly lower at 5.5%. Relative to inflation and population growth, property taxes have grown at a much slower rate since Truth-in-Taxation’s enactment than before.
Utah’s property tax burdens compared to other states
Utah’s major sources of tax revenues are individual income, sales, property, motor fuel taxes, and fees. Of these, Utah is below the national average on property taxes only.
- Individual income taxes: Utah ranks 16th highest at 2.94% of total personal income (TPI) compared 2.41% for the U.S.
- General sales taxes: Utah ranks 13th highest at 3.33% of TPI compared to 2.63% for the U.S.
- Motor fuel taxes: Utah ranks 10th highest at 0.54% of TPI compared to 0.36% for the U.S.
- Property taxes: Utah ranks 36th highest at 2.73% of TPI compared to 3.36% for the U.S.
For a complete report on Utah’s state/local tax and fee burden in FY2005, click [here] to see the Utah Taxpayers Association’s How Utah Compares report. The association updates this report annually.