By Bill Hardesty | [email protected]

At the June 15 South Salt Lake City Council meeting, the fiscal year 2023 budget passed its next hurdle. The council voted to reject the Certified Tax Rate (CTR) for FY2023, thereby adopting their own. Those rates are .001536 for General Purposes of the city and .001029 for public safety.

They also agreed to and operate with tentative interim budgets for all nine budgets. In most cases, the vote was six to one. Shane Siwik, District 5, was the only no vote. The final budgets will be voted on after the Truth in Taxation hearing.

This action sets aside the state requirement for a balanced budget by June 30. The new date is Aug. 31. In addition, this action requires a Truth in Taxation (TNT) hearing set for Aug. 9 at 7 p.m.

A few residents also spoke at the meeting, voicing their opposition to the budget and the proposed increases.

Public hearing

During a public hearing on June 8, 13 people spoke at the public hearing. Seven were SSL employees and six were residents. The meeting was also well attended by SSLPD and SSLFD personnel. Some of the comments included:

"We need to remember that residents are facing a lot of inflation," Eileen Harrington said.

"Comp time doesn't pay the mortgage," said Rebecca Stone, Justice Court Clerk supervisor, speaking about their workload and the practice of awarding comp time for overtime.

"It is estimated that it would cost $75,000 to $100,000 to spin up a replacement officer for me," SSLPD officer Chris Taylor said.

"Everybody wants a raise, but a lot of us are on a fixed income," Susan Bowlden, a social activist, said.

Public Safety on notice

During the June 15 meeting, Natalie Pinkney, councilmember at-large, voiced why she was voting for the budgets. However, she also put Public Safety on notice.

"While I understand the settlement about the public safety specialty fund. I do think that it does improve accountability and transparency when it comes to public safety, and here's why," Pinkney said. "I think citizens should know exactly how much funds they put into their public safety. Public Safety has said time and time again that they're underfunded and they cannot get the result of their job. For me, this is my test and my settlement to public safety. We will fund you, but there are results that we do recommend and accountability that we should have."

Mayor's comments

Before the vote, Mayor Cherie Wood read a prepared statement into the record.

"I wanted to thank our Finance Director, Crystal Makin, for her efforts on the budget that is before the council for approval this evening. The clarity and fiscal competence she has provided to this process are greatly appreciated. 

A municipal budget has many staff contributions, and we are fortunate to have dedicated, qualified professionals working to ensure that all City services, programs, and amenities continue to run smoothly.

The Fiscal Year 2023 proposed budget is the result of the can being kicked down the road on numerous occasions. Opportunities to raise local taxes have been delayed and rejected for the past 16 years. When the little steps are avoided for too long, it takes a bigger leap to catch up. While this budget cycle is a heavy lift, we must invest now in our essential services to continue the level of service we have all come to enjoy in South Salt Lake. 

My desire to present an open and transparent budget is evident in the resolutions before the council tonight. Each fund is presented separately so you know exactly what is in the budget and what it funds. Once adopted, this budget will ensure that our essential services can continue to operate and meet the demands of our ever-advancing community for years to come."

Truth in Taxation law

According to the Utah Taxpayers Association, the “Truth in Taxation is Utah's most taxpayer-friendly law. It's even better than California's Prop 13. The measure was enacted in 1985 at the request of your Utah Taxpayers Association and Tax Commissioner Gary Cornia. While TNT does not technically limit property taxes, it makes local elected officials think twice about increasing property tax rates because they know all citizens will be notified of the increase and its potential impact on their property. They also know that they will have to hold a public hearing where citizens can sound off about the proposed tax hike."

The Utah Legislature passed the Truth in Taxation law in 1985. Before the passage, property tax in Utah was limited to 106%. Property tax could only go up 6% more than the previous year unless voters approved a larger increase.

The TNT law requires specific public notices and public hearings when a taxing entity, such as SSL, proposes to increase its property tax revenue from the previous year. Taxes from new growth is exempted from the disclosure requirements. The purpose of the public hearing is to allow elected officials to explain the reasons for the increase and enable residents to comment on the proposed increase.

TNT is revenue-based. It is not rate-based. The TNT requirements kick in when the revenue increases even if the rate stays the same or declines. "Under a revenue-driven system, changes in rates are irrelevant," states the website Propertytax.Utah.gov.

"Utah's Truth in Taxation laws have proved to be an effective tool in limiting the rate of increase in property taxes. Prior to the implementation of Truth in Taxation, property taxes levied had increased at an average rate of 12% per year since 1981. Since 1986, the rate of increase has averaged 3.6%. Of the 550-plus taxing entities in Utah, an average of 40 entities have proposed increases each year," according to Propertytax.Utah.gov.

Certified Tax Rate

The CTR is determined by the Utah State Tax Commission's Property Tax Division. CTR is a revenue-neutral rate. Before the CTR system was implemented, there was no mechanism to control rising property tax based on increased property value. Like in the ’80s and today.

The purpose of the CTR is to provide the same revenue amount to a taxing entity each year. When variables like demand and inflation cause a property's value to increase, the rate is shifted downward to offset the increased value—this results in the same amount of revenue to a taxing entity.

For FY2023, SSL wants to increase its revenue from taxation. The highest amount is estimated at $29 per month. However, many residents will have a $27 increase based on water use. This increase includes a $9 per month increase for public safety, which will go into the new Public Safety Service Fund (PSS).

"Rejecting the certified tax rate means that our tax rate will remain the same in the 2022-23 fiscal year as it was in the 2021-22 fiscal year. As such, we have kept the same budget level for general property taxes in the coming year as what was budgeted for in the current year," Makin, the city’s finance director, said. "It is possible that the city might receive more general property tax revenues in the future than it has previously been. However, given the volatility of the housing market, it makes it difficult to estimate those funds with a reasonable degree of confidence. As such, we have based the budget on the most conservative estimate rather than running the risk of overestimating and leaving the city short of funds in the coming year."

Tentative budgets

Budget	FY2023	FY2022	(+/-) Change
General Fund	$        22,688,182	$        39,470,000	$          9,732,782
Public Safety Service Fund	$        26,514,600	$                      -	NA
Lease Debt Service Fund	$             236,000	$                      -	NA
Capital Improvements Fund	$        11,769,740	$        12,352,500	$            (582,760)
Water Utility Fund	$        14,210,500	$          4,090,600	$        10,119,900
Wastewater Utility Fund	$          8,708,000	$          8,321,000	$             387,000
Solid Waste Fund	$             603,340	$             551,000	$               49,340
Stormwater Utility Fund	$          2,132,200	$                      -	NA
Insurance Reserve Fund	$          1,064,000	$          1,014,000	$               50,000
Total	$        87,926,562	$        65,799,100	$        22,124,462