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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.

Do you still plan on finishing your series of blog posts on Truth in Taxation? I've referred many taxpayers to your posts in my capacity as an employee in a local county assessor office. It is nice to have such a concise and easy to understand explanation I can give people who have questions. Thank you!!!

Also...have you changed the format on your site? It isn't an improvement.

Jeremy,

We don't know what happened to the format. You're right it's not an improvement. It was unintentional.

We'll be issuing a report on property taxes in October. It will include the following

1.Effective tax rates for the state as well as statewide effective tax rates for schools, counties, cities, etc.

2. Revenue update, including projections for 2007.

3. Historical summary of property tax revenues.

4. Lowest and highest tax rates for cities, counties, school districts, and tax areas

5. Commercial assessed valuation per capita (this will demonstrate that cities like SLC receive tax benefits from commuters because commuters are the main reason SLC has high property tax base per capita.

6. Statewide dollar value of primary residence exemption (this is useful in addressing prop 13 proponents).

7. Info on TNT, including what we have already posted and what we were going to post before our blog format went crazy.

Sweet...thank you! That report will be extremely useful.

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