Friday, December 7, 2007

Last Post from the Machman

Here's a look at this year's breakdown of where your property tax dollars are going:
School districts: $1.27 billion — 56 percent (+100% Income taxes to education)
Counties: $406.6 million — 18 percent
Cities and towns: $332.7 million — 15 percent
Special districts: $255.5 million — 11 percent

Ratings of Property Tax Proposals

1. Annual Market Value Assessments, (Committee, Rep. Harper?), amends TNT requiring a mandatory cyclical (yearly) appraisal using mass uniform computer assisted system to value real property. Counties of the first class by Jan. 09, second class by Jan. ’10, and third class Jan ’11. It is to be jointly administered by the State Tax Commission and Counties.
Rating: Worst, because it does what Weber Co. and some other counties have already been doing to us by "mass reassessments", using computer software. The proposal presented had initial software purchase cost of about $2 Million, plus another $10,000,000 a year to keep it updated or as a user fee. This proposal to use expensive software will just compound the many previous errors already in the tax assessor's database causing a nightmare for the entire State. And at great additional costs on top of the hundreds of millions we already are pouring into County Assessor's offices (29 of them) plus the State Tax Commission. It compounds the disease of current market value by magnifying disparate taxation using contentious software as another layer to Multiple Listing Services (MLS) software already contentious and fraught with errors.

2. Tax Circuit Breaker Amendments (Rep. Allen), (P) Change definition of what is included in “household income” under the Circuit Breaker program. Excludes other working family member’s incomes.
Rating: Poor, due to exclusion of other working family member’s incomes and shifting tax responsibility to others. Does nothing to fix our “disease”. Worse it gives legislators excuses to do nothing to fix the real problems.

3. Senior Citizen Property Tax Safe Harbor (Sen. Buttars), (P) Provide that a senior citizen cannot lose his or her home due to failure to pay property taxes.
Rating: Poor, although probably “means/income tested” it does not address those who sacrifice meds, food, heat etc. before losing their homes/independence. This is just another tax deferral bill. Plus shifts tax burdens. Does nothing to fix the tax “disease”.

4. Exemption Amendments (Rep Dee), (P) Amend circuit breaker qualifying limits and credit amounts. Amend definition of primary residence (based on zoning rather than use of property).
Rating: Poor, due to expansion of already abused 45 % primary residence discounts and because it shifts the tax burden to others. Does not address the tax “disease”. Provides another excuse for legislative inaction.

5. Determination of Taxable Value, (Rep. Dee), Provide that taxable value is based on three-year average.
Rating: Poor, due to last three years of inflated property assessments and captures bad assessment data without quality controls. Does nothing to address/fix the “disease”. Provides "cover" for legislators trying to dodge the real issues.

6. Valuation Base, (Rep Frank), Base property tax on square footage of the improvement (home) and acreage of the real property (regardless of location or market value).
Rating: Fair, simplifies elaborate TNT tax system but disregards reality of location as value factor. A small dose immunization against our tax “disease”. If done correctly it could have promise.

7. Tax Deferral – Senior Citizens, (Rep. Froerer), (P) allow ongoing property tax deferral for certain senior citizen taxpayers.
Rating: Worst, enables mortgage bankers to profit from tax situations, forces sales of properties to repay deferred taxes with 6% interest. Rejected by AARP and citizens in some 25 States which have some form of this legislation. Many commit suicide before resorting to such legislative “relief”. Off the charts-“ugly”, enables continuance of the “disease”. Provides very nasty cover for legislators without solving anything yet creating even worse problems.

8. Increase Circuit Breaker Qualifying Limits, (Rep Froerer), (P) raise the CB from 27K to the “Mid 30’s”.
Rating: Poor, enables continuing inflationary impacts and continues entitlement program yet also continues shifting tax burdens to others already “tapped out by high taxes”. Enables “disease” continuing. Provides another excuse for legislators to hide behind and creates the illusion of reform without actually resolving the major issues.

9. Residential Exemption, (Rep. Froerer), (P) allow the residential exemption to apply to a parcel of property that exceeds 1 acre (where zoning prohibits parcels smaller than one acre).
Rating: Poor, although applicable to the unincorporated areas of Weber County, it shifts tax burdens to all other counties, cities and towns with no such 3 acre minimum ordinance. Does nothing to fix the “disease”. Pandering to local interests without regard to addressing the real (estate) problems.

10. Freeze for Certain Homeowners, (Rep. Ray), (P) Freeze assessed value of real property for seniors(?)
Rating: Poor, this bill would absolutely shift tax burdens to everyone else and over time cause problems for everyone. Seniors need to pay their fair share. The problem is a fairness one for everyone and not just seniors. Does not address the disease. Any "freeze" seems suspiciously to end up just another bill with a "deferral of taxation" attached.

11. Fair Market Defined by Five Year Rolling Average (Sen. Stowell), self explanatory.
Rating: Fair, our problem is it does nothing to address the disease of current market value assessment determinations and in fact captures them – holding on to them over five years. Then it just continues with taxation of speculative and subjective current market value assessments which are totally unacceptable.

12. Limitation on Taxing Authority, (Committee), reduces the maximum property tax rates authorized in statute for certain taxing entities.
Rating: Fair, since it could harness out of control taxing entities with no accountably currently to citizens. Still it does nothing to address the disease. Our problems stem from over assessments and bogus MLS data being used to speculate about a theoretical market value. An impossible task for any assessor to do accurately. Tax rates are not lowered in Dec. for assessments made between the next January through early May.

13. TNT Amendments, (Sen. Niederhauser), Require (General Election) approval of tax hikes which exceed adjusted (by CPI) certified tax rate. Also amend exemption for certain levies.
Rating: Poor, it automatically adds consumer price index rate of increase to“revenue neutral” (not counting new growth revenue increase). Then if a taxing entity wishes to increase the CTR higher than the automatically inflation increased revenue amount calculated CTR, a general or municipal general election majority would be required. This bill makes no provision for revenues (therefore taxes) to actually decrease even if in a depression or recession, for example. In its current form it raises revenues annually and therefore taxes without relief... ever. It does not address the multiples of taxing entities either. Again it does not address the disease- current market value falsification and determination difficulties.

14. School District Funding, (Rep Froerer), provides SITLA funds to a school district and requires the school district to lower its property tax levy by same amount.
Rating: Good, Although it does nothing to fix “current market value disease “ it does take significant tax burden off property tax bill (55 to 75%) and thus offers significant property tax relief. But it has little chance with the Utah Education Association UNION and all the brain washed PTA members they can call upon to defeat it.

15. Assessment Revisions, (Committee), provide that assessor has the burden of proof in assessment valuation appeals instead of the property owner.
Rating: Good, it reverses current situation. Encourages accurate assessments. And removes timidity and intimidation largely from the current process. It is a declaration of freedom from assessor abuses whether mass assessed or personally assessed. This scares the hell out of County Assessor Offices across the State and will go down to defeat before ever reaching the floor of either house unfortunately.

16. School District Tax Base (Separate Bills one by Rep. Harper & later another sponsored by Rep. Dougall), replace all or part of property tax revenue now allocated to school districts with increases in sales and use taxes and/or individual income and corporate income taxes.
Rating: Good, although it does nothing to fix “current market value disease “ it does take significant tax burden off property tax bill (55 to 75%) and thus offers significant property tax relief. Rep. Dougall has again offered this as a swap of 50% off the School District’s portion of our property taxes in exchange for a 1.5% increase in sales tax (from 1.75 to 3.25% ($600 Million estimated revenue). But again the UEA Union and propagandized PTA members will likely rise up and smash any such logical solutions to their fleecing of Utah taxpayers.

17. Transparency (Sen. Neiderhauser), require all public information and employees salary information be posted on-line. Many States already do this, the information is available and just needs to be organized. Salt Lake Tribune and GRAMA already has growing list posted under where most county and public school salary information can be located. This Bill will require all governmental budgets as well as salary information to be posted.
Rating: Excellent, although it does not directly address the property tax disease of current market valuations, it does indirectly by requiring taxing entities to be up front and honest with their budgets, expenses, salaries, etc. Adding benefits values would be better yet since we all are paying for them as well. Governmental bureaucrats hate this bill as well and the UEA Union because it will expose much of the fraud, waste and abuse both local governments (in some instances) and school districts (in almost every instance) have so far gotten by with. Go to and scan each school district looking at the array of administrators and their salaries. Then imagine if their retirement, medical, dental, bonuses, stipends, and other special perks were calculated into those $150,000 salaries. They are costing us twice their salaries, yet the actual teachers still languish far behind other States in their salaries.

18. Acquisition Value assessment taxation, (Bill file reserved by Sen. Niederhauser), requires look back to ’00-’05 for property baseline value. Uses purchase price as baseline for new homes built after 31 Dec. 05. Adjusts yearly based upon lesser of COLA or 3% providing stability and predictability for everyone.
Rating: Excellent, Simple. Easy for taxpayers to understand. Fair and equitable with up front knowledge of tax burdens associated with property transfers. US Supreme Court defined and constitutionally upheld over thirty years of challenges were other “creative solutions” may be bogged down for decades in courts. Effectively puts “other taxing entities” on strict budgets therefore precluding wasteful spending habits. Directly addresses the disease by quarantining it to Centrally Assessed Properties. Has already replaced “the disease of current market value” in virtually every State as the most fair and equitable property taxation scheme available. With the parasitic "Other taxing entities" stripped from our Property Taxes we could see real and significant tax reform.

Good luck folks,

Minor Machman


Anonymous said...

Mr. Bell, we appreciate all of your efforts and completely forgot about the budget meeting. In looking back at your November 24 post, we recall the invitation, but failed to put it on our calendar.

Could you or the webmaster send out a reminder a day or two before important meetings?

I guess we are all busy and need a little more pimping (hand holding).

Thanks again for your efforts.

TaxNoMo said...

The news flash for the Fire Meeting was nice - thanks for the heads up.

wutsua said...

Nice blog. I will keep reading. Please take the time to visit my blog about Levitz Furniture