Heber City Raises Property Taxes
On Wednesday, Heber City voted to increase property taxes by about 10%. The vote was split 3-2 among council members.
The hike in Heber property taxes is for homes and businesses, and is the first increase since 2014. This one will go into effect starting with November bills.
Councilors Mike Johnston, Ryan Stack and Wayne Hardman voted for the increase. Rachel Kahler and Heidi Franco voted against it.
For primary residences, the increase comes out to about $22 a year for a home worth $400,000. On a million-dollar home, the increase will be about $55 a year.
For a business worth $400,000, the increase is just over $40 a year.
Johnston said he voted for the increase to keep up with inflation, bolster a consistent source of revenue and make up for increasing costs that the city’s reserve fund might otherwise have to cover.
“The three of us felt strongly that it was important to minimize the draw-down of our general fund reserves. That is what most people call a rainy day fund. Each year that a city does not hold a truth in taxation hearing and adjust for inflation is a year that the city falls behind in the cost of services. So, that deficit’s going to have to be made up somehow, either in more fees or more fines, or hopefully you’ve increased your sales taxes, or you raise taxes at some point – any of those things in order to balance your budget and stay up with inflation,” Johnston said.
In the fiscal year that ended in July, Heber City’s property tax revenue made up 17% of the city general fund. Sales taxes made up just under 46%.
The increase will boost Heber City’s annual property tax revenue by nearly $200,000, up from $1.9 million a year to about $2.1 million. That’s a fixed amount, which means if someone’s property value goes up and they get reassessed and have to pay more, other people’s taxes will go down. That way, the yearly total collected by the city remains the same.
According to Johnston, the city's projected general fund revenues this fiscal year are nearly $11 million before the property tax increase vote, with sales tax accounting for about $4 and a half million of that. Projected general fund expenses are a little more than $11 million.
The state recommends cities hold reserves up to 35% of expenses. By the end of next year, Heber City reserves are expected to be at $2.6 million, or about 22.% of the city’s expenses. The added property tax revenue will bring that to nearly $3 million.
In social media complaints about the increase, some residents say hiking taxes was unnecessary if the city’s general revenue fund isn’t running at a deficit.
Kahler says the increase was “premature” and not necessary this year, and her “no” vote was to prevent another tax increase after utility rates also went up this year.