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Show THE OGDEN VALLEY NEWS Page 12 Volume X Issue XII October 1, 2004 PROPERTY TAXES cont. from page 1 thirds or more, the result is democracy. The locus of sovereignty must, sooner or later, follow the distribution of wealth (Pipes 3233).” Up until the later end of the 19th century, the principal form of wealth was measured by property ownership that, eventually, was displaced by capital (46). Heavily influenced by the writings of John Locke in his “Two Treatises of Government,” Americans took to heart the ideals originally outlining the rights of “life, liberty, and estates.” Locke further explained that man exchanges some of these freedoms and rights, entering willingly into a social and political compact, in order to secure a degree of security of their persons and possession for the “. . . Regulating and preserving of Property... .” Locke continues by stating that the king must not violate any of his subjects’ property rights; if he does, he is “at war (Pipes 35, 37).” When it comes to taxation, many a subject may feel that they are at war with local, state, and/or federal taxing agents. The taxation of private property is no exception. Many view taxes as a necessary evil—especially property taxes. Political analysts often argue about when America’s modern-day conservative movement began, some contending that it was with Barry Goldwater’s campaign in 1964, others, with the election of Ronald Reagan in 1980. Stephen Moore in his article “Proposition 13 Then, Now and Forever,” states that he believes it began with the “conservative, anti-big-government tide” over 26 years ago with the passage of California taxpayer advocate Howard Jarvis’s Proposition 13 (Moore), revolutionary tax law that has been likened to a “political earthquake,” the jolt of which was felt not just in California’s Sacramento capital, but all across the United States. At a time of inflation, fast growth, and rising property values, Proposition 13 cut California’s property taxes by 30 percent and put a cap on future rate increases. It also incited similar tax revolts nationwide; within five years of the passage of Proposition 13, nearly half of the remaining states in the union passed similar tax limitation measures (Moore). Despite scare tactics and horror stories by opponents who raised visions of school systems’ budgets being drained of money and declining public services due to insufficient funds in the public coffers, on June 6, 1978, 65 percent of California voters approved the ballot measure (Cal-Tax Research), reducing property tax rates on homes, businesses, and farms by about 57%. The newly amended state constitution outlined tax rate restrictions, stating that tax rates could not exceed 1 percent of the property’s market value, and valuations could not grow by more then 2% per annum unless the property was sold. In addition, Proposition 13 required that all state tax rate increases be approved by a two-thirds vote of the legislature and that local tax rates also had to be approved by the voice of the people by ballot (Fox). Based on Huntsville 6 BD, 2.5 BA Over 1 AC Gorgeous lake & min. views! Lease purchase available Now ONLY $309,900! Must sell ASAP! acquisition-value assessments, once property was resold or transferred, other than to an immediate family member, the property was then reassessed at the current market value for taxing purposes (Cal-Tax Research). In 1896, when Utah’s state constitution was adopted, Utah provided for taxation of all tangible property not exempt under its provision. In 1982, Utah law was changed, providing for a residential exemption of up to 45 percent of the property’s assessed value, a law that continues today, reflecting the sacrosanct status of private property in America and the philosophy of limited government through limited taxation; thus maintaining the power of the people through a balance of the distribution of wealth. The current 2000 census indicates that Utah has a population of about 2.2 million people, and is the fourth fastest growing state in the nation. Current trends suggest that the state will continue this growth trend for the foreseeable future. At its current annual growth rate of 2.59 percent, Utah’s population will reach 2.9 million by the year 2010, and 3.3 million by 2015. The state’s population will double in size by 2027 and triple by 2050 (NPG) State Tax Commission reports indicate that Utah residents have the highest tax burden in the West, and the ninth highest burden in total state and local taxes as a percent of personal income. Many attribute Utah’s high taxes with, primarily, the higher-than-average number of children in the state (Utah Tax Payers Association; NPG). However, according to two 2003 reports, property taxes, which cover the cost of state education and other public community services, remain relatively low compared with national averages. The Utah Taxpayers Association’s annual report “How Utah Compares” ranked Utah’s property tax burden 35th among the nation’s united states. Studies indicate that residential property owners pay less than owners from other states with similar properties, due, in large part, to Utah law that governs that primary residents only be taxed at 55% of their market value. And even though commercial and industrial properties are taxed at 100% of their market value, overall, they are still taxed lower than the national average, ranking them from 30th to 4lst (Utah Taxpayers Association, Property Taxes—How Utah Compares). How will Utah’s high growth trend impact future property tax evaluations, especially in relationship to student enrollment in Utah schools? One way Utah has been able to “squeak” by with lower property taxes is by keeping the student-teacher ratio high within its public school system. Statistics from 2000 show that Utah’s student-teacher ratio is the highest in the nation, with an average of 22.4 students per teacher, compared with the national average of 16.5 students per teacher. Projections by state education officials indicate that 100,000 new students are expected in Utah’s classrooms during the next ten years, more than twice the number the U.S. Department of Education originally estimated. Information from the University of Utah’s Bureau of Economic and Business Research indicates that the federal projections are too low since they fail to account for Utah’s higher-than-average fertility rate, which is 27 percent higher than the national average. In addition, almost half of the women residing within the state are in their childbearing years, ranging from age 15 to 44—a 33 percent increase in childbearing women from the past decade. These two factors have state officials bracing for an imminent baby boom (NPG). Though Utah’s population growth is primarily a result of natural increase, migration also has become a leading contributor to the state’s level of growth. While natural increase accounted for about three-quarters of Utah’s growth from 1970 through the early 1990s, with migration contributing to the remaining one-quarter growth, from then on, migration began to push forward for a larger share of this growth, accounting for 43 percent of the growth rate in the 1990s (NPG). And, according may be under inflated. states, “In Bureau 2,129,836, but 2,233,169 state of the A report by NPG 1999, Utah’s the U.S. Census population at 2000 Census counted residents. Census officials lower, statewide, than almost all other states’ (Jerman). Utah’s Truth in Taxation laws were enacted in 1985 as a compromise to direct tax limitations. Prior to 1985, property tax increases within the state were limited to 106 percent of the rate that was collected the previous year. This limit could only be overturned by approval from the voters. The Truth in Taxation laws also increased assessments on property from 20 percent to 100 percent of fair cash value. They also reduced tax rates by a factor of five, and provided for well advertised public disclosure and hearing pro- elected officials to be resolute in avoiding, at almost any cost, the discomfort of Truth-in-Taxation hearing.” But representatives from the Utah Taxpayers Association point out that numerous school boards within the state continue to gain public support for increases in spite of these notification requirements. “Total [S]tatewide property tax collections increased from $900 million in 1992 to $1.7 billion in 2003, an 89% increase,” demonstrating that property tax revenue, adjusted for non TNT factors, have actually increased as a percent of total personal income (Utah Taxpayers Association, “Does Truth-in-Taxation Forestall Needed Property Tax Revenues?” How legitimate and beneficial are the state’s Truth in Taxation Laws when it comes to real life application? In 2002, residents in Weber County’s Ogden Valley held a public meeting to vent their concerns regarding substantial increases in property value assessments within the community. County taxing representatives were invited to attend and address the tax payers’ concerns. State legislative representatives were also invited to attend and address what measures in the legislature could be taken to prevent future dramatic increases. Both Senator Dave Gladwell and Representative Joseph Murray attended, along with county representatives. Numerous residents of the Valley attended, primarily in response to property tax assessment increases, in some cases, higher than 100%. As pressure mounts to change Ogden Valley’s complexion from an agriculture to a resort community, property values will also continue to rise significantly. Established generational families talk about their fear of being taxed out of the very community that their ancestors settled. Would Proposition 13 type legislation be beneficial to them? How would similar legislation impact taxing entities within the state based on how Proposition 13 has impacted California? How would it impact city and county services? Proposition 13, which has been legally challenged all the way to the U.S. Supreme Court in Nordlinger v. Hahn, where the highest court in the land upheld the 1992 decision upholding California’s acquisitionvalue system in a vote of8 to 1. The court PROPERTY TAXES cont. on page 13 Exquisite 3 Bedrooms, 2Baths, inin Fairway Oaks Reduced to $256,500! Incredible setting. Pine tree forest. 6 bedrooms, 2 baths, barn,1.9 acres. 50,000! Must see! Beautiful home on 4.89 ac. Over 6500 sq.ft. Mother-in-law apartment $535,000 3 Bedrooms, family room. Huntsville 3 BD 3. BA, on 2.13 acres. Horse bam, 30'x49’ shop Reduced to $265,000! Ganges 2 30, 2 BA, home in Mountain Green. Beautifully landscaped. $247,900! aon Mini-Ranch 1.69 ac BD, 2 BA, w/full et ready b finish. 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Stephenson, a joint resolution has been introduced to the state legislature twice before that would have initiated changes in the state constitution allowing for legislation similar to California’s Proposition 13. In both instances, there was not sufficient support for the measures (Stephenson). In a recent interview, Utah Taxpayers Association Vice President Mike Jerman explained that Utah’s Truth and Taxation Law provides similar protection to Utah property taxpayers, and is one of the reasons, he believes, that Utah’s property taxes remain Liberty 2 bedrooms, 2 baths plus full unfinished basement. 94 acres REDUCED TO $147,000! Mountain Green building lot. Approximately 1.8 AC July estimated cedures within taxing entities that propose increased tax revenues above those provided by real growth, since Truth in Taxation laws are revenue-driven based on the amount of funds collected each year, not on the rate charged (Truth in Taxation; Historic Overview of Utah’s Property Tax). The Utah Taxpayers Association is a strong proponent of Truth in Taxation, addressing concerns by opponents that claim that the laws unduly restrict local governments’ ability to fund operations through property taxes, and require public hearings that end up being more inflammatory than informational. Opponents state, “.. . the TNT [Truth in Taxation] process forces = =a - 2 Radford Hills executive home w/ Huntsville Cove at River Run incredible views! 2 BD, 2BA, office, 3-car 3 BD, Unfinished basement Gorgeous garage on 1 acre $325,000! home. 2 acres. $359,900! Liberty building lot .34 acre Lots of open space! Spectacular 2.93 acre estate lot below old Nordic Valley Golf Course. Trees, views, septic in, water available. Only $55,000! $179 ,900! 1.78 acreenD IS lots, NL © property, wrigation, culinary $99,900 each! 2 Building Lots on Aspen Dr. Lots back to Wolf Creek Golf Course. Stream, lots of trees. Approx. 1 ac each. 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