Volume XIV Issue XXI The Ogden Valley news Page August 15, 2007 Adoption of a Conservation Easement a Good Solution to Rising Property Taxes By Shanna Francis Ogden Valley News As property taxes continue to climb in Ogden Valley and other parts of the county, considering the placement of a conservation easement on private property becomes increasingly attractive for landowners who wish to retain their land without having to worry about generating or expending revenue each year to cover these rising property taxes. The placement of a conservation easement on your property can be a viable tool in fiscal budgeting and estate planning, relieving the property owner of weighty annual property tax burdens or future inheritance PROPERTY TAXES cont. from page 1 Huntsville Town said they are concerned about how they are going to be able to afford to continue living in the Valley. “Many of our neighbors are older couples and widows on fixed incomes. Like us, they are very worried.” Weber County offices have received numerous calls and complaints, but claim that the situation is out of their hands. Elected county assessor Cheryl Madson states that her office is bound by state law to raise the valuation when property values rise. State law requires property to be assessed at market value as of January 1 of each year. “With respect to real estate valuations, market behavior defines what property is worth when buyer and seller agree upon a price for a given piece of real estate. The Assessor’s office studies such market behavior and applies the results of the analysis to determine ‘market value’ for all real property in the county.” State representatives claim there is nothing more they can do either. Representative Gage Froerer states that the legislature is actively ensuring property taxes remain as low as possible. “Utah ranks 36th in the nation in property taxes paid as a percentage of personal income (3.4% in the U.S. versus 2.7% in Utah). Also, the legislature has decreased the minimum basic school levy by 32% in the last 10 years, including a 7.5% decrease approved in the 2007 General Session.” While county officials may lead tax payers to believe that the issue is out of their hands, elected Weber County Commissioners Kenneth A. Bischoff, Craig L. Dearden, and taxes. The adoption of a conservation easement, on some or all of your private property, can significantly reduce these costs. The adoption of a conservation easement on your property provides immediate tax relief, markedly dropping tax valuation assessments by county officials. Property assessed with a legally recognized conservation easement receives significant property tax discounts similar to those offered on property classified for tax purposes as greenbelt. In addition to annual property tax savings, the adoption of a conservation easement on private property through a donation of development rights to a non-profit land trust organization—such as The Ogden Valley Trust—qualifies the property owner for an additional legally recognized tax ben- efit that can be used to significantly lower the donor’s federal and state taxes depending on the value of the assessed development rights donated to the land trust at the time a conservation easement is generated. A conservation easement can also be used to ensure that legal beneficiaries who inherit property are not forced into selling the inherited acreage to cover the costs of hefty inheritance taxes. For more information about The Ogden Valley Land Trust, or the benefits of conservation easements, contact Executive Director Carla Wiese at 801-510-6139. The Ogden Valley Land Trust is also hosting an open house on September 20, 2007 from 6:00 to 8:00 p.m. at Snowcrest Jr. High where additional information will be read- ily available, and questions from guests addressed. The Ogden Valley Land Trust is a 501(c)(3) non-profit corporation legally recognized by the state of Utah and authorized to acquire and hold in perpetuity real property and/or conservation easements located within the state in order to preserve open land space; carry out related educational and charitable activities related to land use planning and conservation and the improvement of land; conserve land in its natural or undeveloped condition in order to protect scenic, historic, cultural, recreational, agricultural, ecological, or other values benefiting the community; and to acquire and administer conservation easements, primarily in, but not limited to, Ogden Valley. Jan M. Zogmaister have the option and ability to actually lower the county tax rate, an action that would reduce landowners’ property taxes. In a telephone interview with Commissioner Zogmaister on August 6, she claimed that such a tax cut would county services. “Services would have to be reduced if the county’s tax rate was cut.” When asked if she and the other two commissioners had considered this option in relation to the substantial increases in dollars flowing into the county’s general fund, she stated they had not, and refused to be quoted regarding the matter. A phone call to Commissioner Bischoff had not been returned at the writing of this article. Property tax rates are, to some extent, a floating rate that rise or fall according to revenue accrued each year from increased or decreased property valuations, with the exception of revenue generated from new growth. The Utah Taxpayers Association explains, “Generally, as valuations of existing property increase, property tax rates decrease. This automatic reduction in property tax rates prevents local governments from getting a windfall simply because valuations have increased. “For example, if valuations of existing property increase, the property tax rate may decrease to maintain revenue neutrality. “The reduced property tax rate is known as the certified tax rate (CTR). This rate is then applied to all property.” In contrast, set tax rates are adopted by each individual city, county, or other taxing entity such as special fire, water, or school districts, and remain static until the taxing entity chooses to raise or lower the rate. This rate is used to calculate budgets from which the CTR is calculated, which, in turn may affect the primary, or set tax rate. The rate setting process begins with the budgeting process. Entities estimate how much property tax revenue they need. Before March 31 of each calendar year, county treasurers provide taxing entities with information about property tax revenues collected and distributed to them during the prior tax year. This revenue amount becomes the baseline revenue for current year certified tax rate (CTR) calculations. The county assessor and State Tax Commission provide valuation information to the county auditor, including changes in value resulting from reappraisal and factoring. The State Tax Commission and county auditors calculate certified tax rates (CTR) and the auditor provide taxing entities with valuation and certified tax rate information. The CTR provides a taxing entity with the same amount of property tax revenue it received in the previous tax year plus any revenue generated by additional growth. New growth generally refers to the change in a taxing entity’s tax base from one year to the next due solely to new property values added to the tax rolls. Counties and other taxing entities have the ability to adopt their individual set tax rate. In 2005, Weber County Commissioners chose to raise that rate, increasing the percentage of tax dollars they could collect from property valuations. Due to the large jump in new growth in Weber County during the past several years, Weber County Commissioners now have an option to lower this tax rate—an almost immediate option that would result in lower property taxes for home and property owners. Revenue from new growth flows into the county’s general fund and can be used at their discretion. It does not figure into the calculations for the certified tax rate (CTR). Thus, any increase in new growth dollars are an added bonus to the county’s general fund. According to Weber County Comptroller Dan Olsen, rounded estimates for new growth funds that were collected by Weber County during the past three years are as follows: 2004: $ 192,000 2005: $ 460,000 2006: $1,362,000 With the trend of rising revenues flowing into the county coffers due to rising growth rates, including the windfall in 2006, a cut in the current set tax rate may offer a partial solution to rising property tax rates in Weber County. Valley wide, residents are asking what can be done to address skyrocketing property taxes. One group in Huntsville is asking residents to visit www.Huntsvilletown.com and sign a petition asking to roll back the 2005 tax increase and possibly begin looking at California Proposition 13 type options to level out property taxes until a home is sold, at which time it would be reassessed. Weber County’s set tax rate of 0.4063% is higher than the statewide average for other counties. Ogden City actually has the highest combined property tax rate in the state, with Weber County’s tax rate figuring into this equation. PROPERTY TAXES cont. on page 17 Gage Froerer & Assoc. (801)745-4221 Eden Office 2405 Highway 158 BRANCH BROKER Deborah Hegg (801)745-1538 d.hegg@relia.net Cindy Browne (801)644-6607 cindyb@ c21utah.com Joan Woodruff (801) 675-0444 Joan4c21@aol.com Erin Dauby (801)430-0680 erin@c21utah.com