PUBLIC SCHOOL FUNDING - House Bill 391
This Bill passed through the House Revenue and Taxation Committee today. It will shift 20 to 30% of property tax bill from our property tax notices in August to sales tax increase of 1.65% on non food purchases or unprepared food.
Based upon the House Committee debate I give it about a 30% chance of passing through the Senate. MM
2 2008 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Wayne A. Harper
5 Senate Sponsor: ____________
7 LONG TITLE
8 General Description:
9 This bill amends provisions in the Minimum School Program Act, the Property Tax
10 Act, and the Sales and Use Tax Act relating to certain property tax levies and the
11 funding of public school programs.
12 Highlighted Provisions:
13 This bill:
14 < repeals the authority of school districts to levy certain property taxes;
15 < requires a school district to abate certain property taxes raised for debt service to the
16 extent that money is available from other sources for the payment of bond interest,
17 principal, and redemption premiums;
18 < requires a school district to use the money received from the increase in the sales
19 and use tax to offset the loss of certain property tax revenue;
20 < prohibits a taxing entity from imposing a property tax rate higher than the taxing
21 entity's certified tax rate for three years;
22 < increases the sales and use tax on certain transactions by 1.65%;
23 < dedicates the revenue generated by the 1.65% increase to the Uniform School Fund;
24 < adjusts a school district's certified tax rate due to the repeal or amendment of the
25 property taxing authority of the school district;
2. The next Bill which passed unanimously in the House Revenue and Taxation Committee today was HB 333 S3. Senior Citizen Homeowner's Credit.
It basically now says the Circuit Breaker credit for those 67 or older and who can prove (first page of IRS 1040) that they earned less than $33,000 a year can apply for the credit. This 8th category adds in theory 5,792 parcels or properties statewide and extends the 20% additional discount. In other words on primary residences where we normally get the 45% discount off full market value, this new category, or increase in the maximum of the Circuit Breaker from basically $27,000 to $33,000 allows those who qualify for the Circuit Breaker provision to get an additional 20% reduction. So if your residence has a "market value" of $250,000, you would pay property taxes based upon 35% of that value ($87,500) instead of 55% ($250,000 X .55 = $137,500). And if you rent and qualify you get a whopping $50 credit.
It took two (2) years for the sponsor to understand that no one, and I mean no one, would accept the deferred taxes @ 6% interest penalty and a lein on their property. So that disgusting part of this bill was finally dropped after heavy senior citizen (I am one) lobbying against it. Committee Chairman Dougall said, "I have found no one who liked the deferred taxes with interest, part of this bill."
Again given the debate, I give this bill about a 60% chance of passing through the Senate based upon the fiscal note (how much the shift in taxes will be to other property owners) of between $300,000 and $400,000. The Senate will be looking for a relatively "cheap" way to go, so they can claim they actually did something about property taxes for the poor...defined as over 67 and under $33,000/yr. income.
When asked why the $33,000 limit, the sponsor (Rep. Froerer) said, "We wanted to keep it (meaning the fiscal note or tax shift) under $400,000. "Why" was never discussed nor asked.
Rep. Wimmer wanted to extend it to young couples and lobbyist Rowland agreed with him saying this is the way to target relief to young families. There was no further debate as time had run out.
Actually, the Utah Realtor Association did like deferred taxes and supported it for these two years, which has held it up unnecessarily. (Re Bryan Kohler's remarks from 19 Sept 07.)
Some other stuff passed but was relatively insignificant with regard to property taxation. Neiderhauser's bill to require an election to raise our property tax rate higher than the Consumer Price Index was killed in committee.
Senator Neiderhauser is sponsoring a bill that would fund a Revenue and Taxation Interim Committee Task Force (thus insuring they pay themselves) to study property tax alternatives over the Interim (a term they use to describe working session between the regular legislative sessions). The problem with his proposal is it will be manned by our elected Senators and Representatives (about six Rs and six Ds) who generally have no interest nor qualifications. It therefore will have no credibility or very little due to having had the foxes studying locks for the henhouse. They are making the most basic and fundamental errors and mistakes known to man. They have been told what to do and how to form a Blue Ribbon Study Committee but had rather pay themselves to come up with totally predictable results. Waste more time and more or our money giving the ruse that they are serious about property tax reform. This is not the case I regret to tell you all. They are serious about keeping the gravy train rolling along and getting rich off needless and exhorbitant property assessements and esculations. In maintaining the status quo in most cases.
I have said it many times and I say it again. This element simply has to be replaced with people who will represent me and you and not special interests like the Realtors Association and Developers who have taken over our legislature.
They are slick, mostly Political Science grads and lawyers who are prospering off the real estate and development business at our expense. They have been chipping away at every conceivable barrier against development at every level of government using a well funded "machine". We have recently seen the "Powerville" for example. And there are ongoing attempts to pass legislation to require municipalities to turn over publicly funded municipally owned golf courses, recreational facilities, etc. to developers. And many more insidious legislation has been passed and will be passed unless we wake up and fight back.