Politics & Government
City Council votes against 2022 property tax increase, Finance Director hints at one soon
The Lehi City Council met on Tuesday, July 13, with all members in attendance. Councilwoman Katie Koivisto joined remotely from St. George.
The most notable agenda item included the City electing not to raise Lehi residents’ property taxes. The Council is required to adopt the certified tax rate for the upcoming fiscal year for each annual budget cycle.
Utah state law requires taxing entities to follow a Truth-in-Taxation (TNT) system. The TNT system is revenue-driven instead of rate-driven, resulting in a decreased property tax rate when property values increase. The objective of the TNT system is to be revenue-neutral and have the taxing entity receive the same amount of tax revenue each year per property unit.
The 2021 certified tax rate was .001451%, and the adopted 2022 certified tax rate will be decreased to .001429%.
Lehi City hasn’t raised its property tax rate in over twenty years. Despite the City not raising the homeowner tax rate, City revenues have continually increased due to the City’s rapid growth.
Even though leaders chose not to raise the rate this year, Lehi City Finance Director Dean Lundell encouraged the City Council to consider it in upcoming years.
“If you didn’t do a property tax increase for 20 years, then it’s like buying 2021 goods with 2001 dollars,” said Lundell.
“Most cities are afraid [to raise taxes], but the longer you go without doing it, the larger the increase needs to be and the more painful it is. As the City Finance Director’s perspective, in my mind, it makes a lot of sense to do it every couple of years and make up the inflation we’ve lost,” continued Lundell.
Lundell also referenced the Country’s rising inflation rate.
“The CPI (inflation) is up almost 5% from just January to June. If we don’t ever adjust the property tax rate to make up some of that, then we lose ground,” concluded Lundell.
Councilman Paul Hancock, the only Councilor to comment during the agenda item, shared concerns with Lundell.
“It isn’t the popular thing to discuss, but it’s the prudent thing. In Utah, generally speaking, we pride ourselves on being fiscally conservative and to not evaluate that [tax rate] isn’t a fiscally conservative thing even if it [a tax increase] isn’t popular.”
Utah County residents will see a decrease on their November tax bill this year after the Utah County Commission recently voted to cut last year’s 67% property tax increase in half.
Lehi property owners’ three largest taxing entities are Alpine School District, which receives 69.83% of property tax revenue, followed by Lehi City at 16.19% and Utah County at 7.07%.