Truth in Taxation

1
Truth in Taxation

• Public Hearing
• August 16, 2007

2
Budget Overview

• Baseline budget (funded existing services and
  programs)
• On-going expenditures funded by on-going revenue
• One-time revenues support one-time expenditures
• Avoid balancing current budget by postponing
  necessary expenditures by obligating future
  revenues

3
General Fund Budget Summary
Contribution to Fund Balance will be appropriated
to fund shortfalls.
4
How does the City use all the money?
5
City Staffing - of Personnel Budget
Dept, of employees, of personnel budget
6
Draper City Mission

• Draper City is a community that preserves it
  unique identity and heritage, and provides
  protection and services for its citizens.

7
Drapers Vision for the Future

• Drapers Vision for itself is one of a
  progressive, sensitively-developed community,
  which is visually attractive and livable, easy to
  get around in and looks to the resources and
  talents of its residents who make valuable
  contributions to continuously renew and
  revitalize the City to the community, through a
  wide variety of land uses, activities and
  opportunities.
• -Draper City General Plan 02/17/2004 (with
  emphasis added)

8
Draper Citys Difference

• More parks and open space per square mile to
  maintain and develop than any other city in Salt
  Lake or Utah counties
• New commercial and residential growth which
  requires infrastructure development
• Unique geographic location

Source Trust for Public Lands
9
What is Truth-in-Taxation?

• Utah State Property Tax Law that means
• When property values rise
• property tax rates fall.
• The adjusted rate each year is called the
  Certified Tax Rate.

10
Truth-in-Taxation Requirement

• When a City proposes to increase its property
  tax revenues above what was budgeted the previous
  year..., a public hearing and public notice is
  required by law.

11
Truth-in-Taxation Hearing

• Allows City officials to explain reasons for the
  proposed increase
• Allows the citizens to comment on the proposed
  increase

12
Tax Sources

• State of Utah
• Income Tax
• Sales Tax
• Property Tax

• Draper City
• Sales Tax
• Property Tax

13
State Income Tax

• Revenue source for State of Utah only
• 100 dedicated to education
• Revenue increases as citizen income increases
• Average household pays 1,831 per year

14
Sales Tax

• Revenue source for State of Utah, counties and
  municipalities
• Revenue increases as citizen spending increases
• Average household pays 1,805 per year

Source Average provided by Utah Taxpayers
Association Taxing Times 04/13/2007
15
Sales Tax Distribution
16
Sales Tax Distribution

• If you were to buy a sofa from IKEA for 1,000,
  your final payment would be 1,068.50 including
  sales tax.
• The sales tax would be distributed as follows
• Utah State 47.26
• Salt Lake County 10.96
• Draper City 5.14
• Shared based on population 5.14

Note Sales tax rate reflects Salt Lake County
rate.
17
Property Tax

• Revenue source for county, municipalities
  (cities), schools and special districts
  (libraries, fire, transportation, sewer, etc)
• Each entity is responsible for its own rate
• Revenue increases through Truth-in-Taxation and
  growth
• Average home pays 1,437 per year

18
Property Tax Distribution 2006
Draper City only received 8.3 of each property
tax dollar paid in 2006.
19
City Comparison Population(All cities in Utah
with population 10,000 of Draper)
Source U.S. Census Bureau 07/2006
20
City Comparison Tax Rate(All cities in Utah
with population 10,000 of Draper)
Sources Utah Tax Commission website Utah
Taxpayer Association Newsletter Volume 32 No. 8
08/2007
21
City Comparison - Summary

• Draper City is the 16th largest city in Utah in
  population
• In comparable cities, Draper City is the 10th
  largest city in population
• In comparable cities, Draper City will have the
  4th lowest property tax rate

22
Drapers Property Tax Rate History
23
How much does Draper City receive?

• 2006 State-wide Average for all cities
• 18.6 of every property tax dollar paid
• 2006
• 8.3 of every property tax dollar paid
• 2007 (Certified Tax Rate)
• 6.9 of every property tax dollar paid
• 2007 (Proposed Tax Rate)
• 12.4 of every property tax dollar paid

24
Property Tax Distribution - 2007
State-wide Average information provided by Utah
Taxpayers Association Taxing Times dated
04/13/2007
25
Property Tax Increase Annually
Median tax-assessed home value
Source Utah Taxpayers Association Taxing
Times dated 04/13/2007
26
What does it mean to me?
Median tax-assessed home value
Source Utah Taxpayers Association Taxing
Times dated 04/13/2007
27
Effect of Proposed Property Tax
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Reasons for the proposed increase

• Public Safety
• Road Infrastructure
• Recreation Department
• Town Center
• Inflationary Losses

Please note None of the following budget
shortfalls have been included in the Tentative
Budget for year-ending June 30, 2008.
29
Public Safety Shortfall
Fire Station is currently in the review phase of
construction.
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33
Road Infrastructure Shortfall
Example of roads and infrastructure currently
being considered for improvement (list is not
complete) 300 E 13200 S 10-15 Traffic Signals
(200,000 each) 1300 E 13800 S Road Widening
34
Recreation Department

• Draper City has more parks and open space per
  square mile than any other city in Salt Lake or
  Utah counties
• Draper City does not offer a recreation program
  for the community
• Citizens have requested this service

35
Town Center Master Plan
36
Vicinity Map
37
Site Photo
38
Inflationary Losses

• Because Certified tax rates do not adjust for
  inflation, local governments occasionally
  increase property tax rates to recoup
  inflationary losses.
• -Utah Taxpayers Association 08/2007 Volume 32
  Number

Chart Source Bureau of Labor Statistics
39
Inflationary Losses

• Draper Citys property tax rate has been adjusted
  once since incorporation in 1978 and only to keep
  the rate even with the prior years rate 1997

40
Shortfalls Summary
41
Conclusions

• Weve listenedto you, our citizens
• Weve identified our communitys needs
• Weve set long and short-term priorities
• Were determined to find the best ways to address
  problems in a way that is consistent with the
  core values of our community
• We are here to serve you