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Property taxes are important because they provide a stable, consistent source of funding for public safety, streets, sidewalks, parks, libraries, and other services provided by the City.
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Property taxes are an important source of revenue for schools, libraries, and city and county governments. Murray City receives 13% of the total overall property tax revenue collected.
No. To adjust property taxes, the City must initiate a public hearing process called Truth-in-Taxation and decide whether the adjustment is necessary.
The blue bar displays the percentage of growth in property tax revenue received by the City, and the orange bar displays the rate of inflation for that same year. For example, in 2012 the rate of inflation was over 2% and the City’s property tax revenue was less than the previous year by -.25%.
There are two possible reasons for the change. The first is that another taxing entity (school district or Salt Lake County) has gone through the Truth-in-Taxation process and raised their rates on one or more years which would increase your taxes. The second is that your property has increased in value more than other properties. When the property value of the City increases, the tax rate automatically decreases which gives the City the same revenue from year to year. However, if your property increases in value at a rate higher than the tax rate decreased then you will see a tax increase. The City will not see that increase because another property’s value would have decreased or become tax-exempt which would mean a tax decrease, and results in no change to the City revenue.
Between 2008 and 2016, the City operated with considerably reduced revenues stemming from the economic downturn. In 2016, the City finally recovered to the same annual revenue amount it received in 2007. During those years, inflation increased an average of 2%-3% per year meaning costs increased but the City’s revenues remained reduced.
The City focused all its resources on providing the same levels of service and maintaining the City’s infrastructure (e.g. parks, roads, sidewalks, facilities) within these financial restraints, however, this approach purposely focused resources to items that required attention and delayed normal infrastructure maintenance and compensation issues.
It has been over a decade since 2008, and it has become important for the City to find a solution to funding infrastructure maintenance and protect its investment in a trained and professional workforce.
The City has included a 5-year infrastructure maintenance and replacement program in this year’s budget. This program requires annual funding of $5.1 million per year. Without this tax increase, the City will not be able to budget for this program and the City’s assets will continue to age without the proper maintenance which leads to the increased cost of replacement.
In addition, the City recognizes its greatest asset is its workforce. Knowing the increasing competitive environment for trained professionals (especially in law enforcement), the City commissioned a comprehensive compensation study to protect its investment. The study identified the City’s compensation structure as below average when compared to other similar agencies. As such, the City has adopted a compensation plan and adjusted employee wages to the average market for their experience and position. The majority of this change is directed to the police and fire departments.
The City has a 5-year projection based on current inflation and knowledge. This model indicates the City will not need another increase until 2024, however this decision will be evaluated each year as the budget is prepared.
Murray City prides itself on its independence from special districts and county services. The City believes that it is best able to manage service levels and costs through ownership and self-management. All other cities in Salt Lake County utilize the County or special districts to provide the same services provided by the City.
So, to have an ‘apples to apples’ comparison of property tax rates, the chart below combines the city and any special district rates for government services (e.g. parks, streets, general government, police, fire, and cemetery). The rates for other cities are estimates based on information available as of June 20, 2018. Since many cities are entering the Truth-in-Taxation process to increase property tax mill levy rates, these rates are subject to change based on council action.