Millions of dollars in proposed tax increases denied Utah cities, counties by tightened Truth in Taxation process

SALT LAKE CITY — Millions of dollars in proposed tax increases are now off the table for 39 cities and other entities across Utah because they did not meet all the requirements for the “Truth in Taxation” process.

This stems from recently passed laws, SB202 and SB29, that direct the Utah Tax Commission to deny proposals that do not meet the standards, where in years’ past the commission may have been more lenient.

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Utah Taxpayers Association President Bill Hesterman said that while it may seem trivial to some, it is the law.

“In the session this year, Senator (Chris) Wilson had a bill … that gave the tax commission a little more authority to let them know, ‘Hey actually you didn’t do it right. You didn’t follow the law, so we need to impose the law, and not allow you to have your tax increase,” Hesterman said.

A single missing slide

Draper Mayor Troy Walker said their request for taxes to generate $953,000 for a much needed new firetruck was denied because they forgot a single slide during their Truth in Taxation presentation.

“One of the requirements in the statute is that you have to show a slide or give the voters in the room information about every other entity in the county that may be raising taxes, and we didn’t put that slide up,” Walker said.

He said he is frustrated there was no way to remedy the situation. 

“The legislature’s made it clear [the tax commission doesn’t] have discretion and they shall decertify cities or entities that don’t follow it exactly,” Walker said. “So there’s no discretion. There’s no ability to negotiate. No ability to remedy. You’re just kind of stuck.”

He said they will make do this year with the budget’s reserves, and will try to go through the process again next year.

Draper is not the only one that was denied a big tax increase though. During a Revenue and Taxation Interim Committee meeting on September 16, the tax commission said there were initially 81 proposals for tax increases this fiscal year. Of those proposals, 39 were not certified. 

The list of denials is both extensive, and expensive. For example, the Alpine School District lost out on almost $23 million, and the Granite School District was denied for their nearly $18 million proposal.

Truth in Taxation Certification Status by KSL NewsRadio

State Sen. Chris Wilson, R-Logan, who sponsored the recent pieces of legislation that cracked down on the process, said during the committee meeting that the entities did not seem to have a problem with his bills before they were passed.

“We didn’t really add anything new this past session to what has being going on, and what they should have been following for years and years and years,” Wilson said. “The difference is that now the tax commission can deny the increase in taxes if they don’t follow the transparent procedures that we’ve come up with.”

Utah counties, cities, were informed ‘several times’

Deanna Herring, Deputy Executive Director of the Utah Tax Commission said during the committee meeting that they informed entities about the process several times, but maybe some aspects were still unclear.

“It’s written fairly clearly,” Herring said. “It seemed to us that it couldn’t be interpreted so many different ways, and then now this year we realize that when people are held to this strict reading of it, knowing there is this consequence at the end, we found out there were a lot of different interpretations.”

Herring and other Utah tax commission leaders suggested that maybe the legislature should look at clarifying the language, so entities do not run into the same pitfalls in the future. 

“If you read the plain language of the law, it seems logical and it makes sense,” Herring explained. “But obviously there were interpretation [differences] and I think that difference is what we have made accounts for over the years.”

Wilson admits there is a sort of checklist they have to work through as they try to meet the standards of the Utah Truth in Taxation process. However, he said the mistake they made was not part of the checklist. 

“This is frustrating because we had the hearing. We took the input. We were transparent about what we are doing and why we are doing it, and we kind of get nailed on a ticky-tack part that really isn’t relevant to what we were doing,” Walker said.

“But it’s in the code, and I think hopefully the legislature is going to look at it again in January.”