The proposed property tax increase is $950,000. This amounts to $5.17 per month ($62 per year) for the average home.  

The purpose of the property tax increase is threefold: Hire additional parks and information technology (I.T.) staff, ensure the City’s ability to avoid unnecessary debt, and recapture lost buying power due to inflation.

• Parks and I.T. Staffing. In recent years Bountiful City has invested in the community by adding 25 acres of new parks and amenities like Creekside Park, Bountiful Town Square, Washington Elementary Fields, the Veteran’s Memorial Park, and the Brickyard Bark Park. These properties are (and will be) well-loved and require a higher level of maintenance than traditional grass fields. In addition, the City’s technology needs have increased manyfold since the last time staffing was changed. New funding will help add two new full-time parks employees, one new I.T. employee, and related equipment.
  
  
• For more detailed information on Parks and I.T. service-level increases click here
  
  
•  Avoid Unnecessary Debt. Unlike most cities, Bountiful has a “pay-as-you-go” philosophy: save and use cash for purchases and large capital expenditures rather than borrowing or leasing. This philosophy allows the City to avoid paying interest and saves taxpayer money. Historically the City has been able to use the majority of its sales tax revenue to fund its capital improvements (e.g., roads, snowplows, police vehicles, etc.). Over the past eighteen fiscal years the City has been using more and more sales tax revenue on operational costs (e.g., personnel related costs, utilities, maintenance, etc.) rather than putting it in reserve for future capital improvements. The result of this negative financial trend is a depletion of cash reserves that are necessary to maintain the City’s financial policy to remain a pay-as-you-go entity.
  
  
  •  For more detailed information on the City’s financial policy over cash reserves click here
    
    
• Recapture Lost Buying Power. Bountiful’s property tax revenue has not kept pace with inflation. Utah property tax law does not allow cities to capture inflation. If property valuations go up, a City’s tax rate goes down to keep revenue neutral. Additional property tax revenue comes to a city only if there is new growth or if the rate is increased by the City Council. Because Bountiful has done this only two times in the last 20 years, the rate has continued to decrease, reducing the City’s buying power by 42% or $885,314.

The proposed tax increase for the average Bountiful homeowner’s total tax bill will be 2.2%.  As an example, using the average home value in Bountiful of $434,000 the proposed increase would total $62 per year or $5.17 per month.

Your total tax bill is comprised of the tax rates of several taxing entities of which Bountiful is just one.  The proposed increase in just Bountiful City’s tax rate is 36.7%.  This represents the percentage difference between the certified tax rate of 0.000708 and the proposed tax rate of 0.000967.

Public comment will be taken during both the Presentation & Open House on July 29 (7:00 p.m.) and the August 11, 2021 (6:00 p.m.) public hearing.  Both will be held at City Hall (795 S. Main Street).

Your comments can also be made by email to info@bountiful.gov

The Davis School District is the recipient of the largest portion of property tax revenue, about 64% of the total amount collected, followed by Davis County, which claims about 19%.  If the proposed tax increase is enacted, Bountiful City would receive approximately 8%. Special districts (Water, Sewer, Fire, Recreation, and Mosquito Abatement) share the final 9% of total property tax.

Money collected from property taxes goes into the City's general fund which pays for important services such as police protection, fire and emergency services, parks, streets and signs, sidewalks and snow removal. Property taxes cover only a fraction of what the city needs in order to provide these services.

If the proposed tax increase is enacted for fiscal year 2022, Bountiful City would receive about ~$3.5 million in general fund property tax revenue. To put this in perspective, this amount is just 17.24% of the total budgeted revenue for the General Fund. This property tax revenue would only cover 23% of the amount budgeted for public safety (i.e., police & fire/EMS) alone.

Sales taxes, fund transfers from Bountiful Power, grants, fines, and user fees cover the rest of the city's general fund costs. Collectively, these funding sources enable the city to provide necessary services for Bountiful residents.

The property taxes from Bountiful homeowners only come to approximately $.17 per day, or $5.17 per month for each resident.

In the past 23 fiscal years, Bountiful has increased its property taxes only twice.  These came in fiscal year 2019 and 2001.

The fiscal year 2019 tax increase was $300,000 and covered the following:
      ♦  $75,000 to replace revenue taken by State of Utah for homelessness
      ♦  $225,000 to add two additional police officers and related required
          equipment

The fiscal year 2001 tax increase was ~$235,000 and covered the following:
      ♦  Pay for an upgrade of city networking equipment, the hiring of an
         additional firefighter, and some of the construction costs of Foss-Lewis Park

Bountiful City's proposed rate for 2021 would make the City the third lowest comparable tax rate in Davis County.  This assumes that no other taxing entities increase their 2021 tax rates (currently 11 of the 15 Davis County cities are proposing a tax increase for 2021).

Bountiful City's 2020 certified rate made the City the lowest individual city tax rate and the second lowest comparison tax rate in Davis County.

Click here to view property tax rates for all Davis County Cities.

Property Value: The value of your home/business property is determined by the Davis County Assessor. Property values always fluctuate. The market itself drives property values throughout the year. As homes sell, some areas go up in value, some areas go down, and some don’t change at all. The Accessor uses this information to value each property. Some property values may change dramatically in a single year, while other property values may change little or not at all. The following year the reverse may be true.

Primary Residence Exemption: In the State of Utah there is a 45% exemption on primary residential; homeowners only pay taxes on 55% of the assessed value of their home. (If the County Assessor determines that the value of a home is $200,000, and that home is the primary residence for someone, the owner would pay taxes on that property as if it was worth $110,000 (55% of the full value.) Commercial properties and secondary homes are assessed on 100% of the property value.

There are a few things to keep in mind when considering how your property taxes might change from one year to the next.

1. By Utah State law, there is no "cost-of-living" or inflation adjustment to the property tax. The amount of money Bountiful City receives from property taxes is fixed, regardless of inflation or changes in property market values.
2. Unless a city holds a Truth in Taxation hearing and raises property taxes, they can only receive the same amount of property tax they received in the prior year, plus any increase from NEW development (additional property taxes from new homes or buildings added to the city). If the city wants to receive an increase in funds from property taxes, they must hold a Truth in Taxation Hearing. State law requires that if the city intends to increase property taxes a full-page advertisement must be published in the newspaper and a public hearing must be held. The full-page advertisement will state the impact, or estimated increase in property taxes that would be realized by the home owner.
3. Property taxes don't go up just because the value of your property goes up. State law requires that, all other things being equal, if a home's market value goes up by 15 percent, the tax rate charged by the city (or any other taxing entity) must be reduced by 15 percent, so that the homeowner pays the same amount of taxes as the previous year. Conversely, if property values drop by 15 percent in a given year, property tax rates increase by 15 percent so that again, the homeowner pays the same amount of taxes as the previous year.

However, there are additional factors which cause property taxes to fluctuate from year to year. (Such as in the following examples:)

• First of all, as explained under "How much of my property tax bill goes to Bountiful City?" and as indicated in the associated graph, the city is only one of several entities which can charge a property tax. If taxes go up, it is possible one of the other entities may have raised taxes after a Truth in Taxation hearing.
• Second, as mentioned earlier, property values are assessed county wide by the County Assessor.  The city is only allowed to receive in property taxes the same amount of revenue which they received the previous year, plus taxes on new homes or developments. So, if property values go up, the rate goes down proportionately, and the amount the property owners pay stays the same. However, consider a scenario where property values on average increased by 15 percent, but in one part of the city they increase by 20 percent, and in another part of the city, they only increase by 10 percent. The property tax rate would drop by 15 percent (proportionate to the average property value increase). But the part of the city which had a 20 percent increase in property values would pay slightly more property taxes than the previous year. The portion of the city which had a property value increase of 10 percent would pay slightly less in property taxes than the year before. This same principle applies to all agencies, such as Davis County, the Davis School District, and special districts (such as Water, Sewer, Fire, and Mosquito Abatement.)
• Third, as some entities have bonds which were approved by voters and are paid for from property tax revenues, property taxes dedicated to the repayment of the bonds fluctuate as bond payments change from year to year.

By statute, the City receives the same amount in property taxes as they received the previous year (not counting new development). While the city sets the property tax rate as a base rate, the Davis County Auditor determines the "certified tax rate" based on the previous year's assessed valuations across the entire city and the amount of property tax received. This "certified tax rate" will go up or down as needed to arrive at that "same amount of tax" figure - the rate which will give the city the exact same amount of property taxes as the prior year. The only way the city can get more property taxes than allowed by the "certified tax rate" is to hold a Truth in Taxation hearing and make a case for a tax increase to the public.

Truth in Taxation is a process established by the Utah State Legislature where city and county governments and school districts are required to hold a public hearing and an affirmative vote of its legislative body to increase the property taxes within their respective taxing districts.

Utah Law requires that property tax rates automatically adjust when property values increase or decrease so the amount of money Bountiful City receives is the same from year to year. In periods of inflation a government agency will receive more money from property taxes because a given property’s value increases. The laws are designed to hold property owner’s tax burden at a constant level from year to year unless the taxing entity’s legislative body votes to increase the tax through a process of notification and public hearing.

There is no "cost-of-living" or inflation adjustment to the property tax. The amount of money the city receives from property taxes is fixed, regardless of inflation. Because the base amount of tax revenue is fixed and Bountiful City has not done any inflationary tax increases, over time Bountiful City’s property tax buying power has eroded by inflation. Over the past 20 fiscal years the buying power of the city’s property tax dollars has decreased about 42% or $885,314, as illustrated in the graph below:

Source: Bureau of Labor Statistics CPI Inflation calculator https://www.bls.gov/data/inflation_calculator.htm

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