Monday, December 22, 2008

A Heads Up on Further Unexamined Tax Loopholes

A legislative no-brainer: Banning the issuance of building permits to developers who are already delinquent in their property taxes

Last Wednesday we published a heads up regarding property tax reform legislation which House Representative Gage Froerer plans to offer up during the 2009 legislative session.

In that connection we'd like to direct our readers' attention to yesterday's Sharon Zini letter to the Standard-Examiner editor, which fleshes out part of the underlying problem addressed in Froerer's referenced bill, and further discusses another taxpayer inequity issue which we're hoping to see addressed by the legislature during in 2009. Read the full text of Ms. Zini's letter here:
Many abuse Weber County's tax rules
With our local property tax dependant local government officials scrambling to meet their own budgets during the current economic downturn, it seems to us imprudent to ignore some of the loopholes which result in non-collection of thousands of dollars in taxes which ought to go to local governments. Banning the issuance of building permits to developers who are already delinquent in their property taxes seems a no-brainer to us. When delinquent property taxes go unpaid, local governments essentially assume the role of an unwilling lender; and property owners who do pay their taxes in a timely manner assume the economic burden for those who don't.

Hopefully this loophole will not remain further unexamined by our elected legislative representatives this year.

11 comments:

One Who Noes said...

Great scam for real estate developers. Perfect for a state that's dominated by Republicans.

Does Ms. Zini really think Ogden Realtor and State House Reprentative Gage Froerer would even consider sponsoring a bill to limit the free loans to his real estate developer pals?

Does anybody really think such a bill would pass in the heavily real estate dominated Utah legislature?

Get real, people.

Larry Zini said...

In fact, Gage tried to get such a bill through last year and was rebuffed by his own party in committee hearings that we attended and testified for the bill.

Without his bill last year which would have forced the County Assessors in the state to cooperate with Gage and his staff, it is next to impossible to accomplish this effort.

On the face of it, shouldn't we all be outraged that the County leadership is dipping into the rainy day fund instead of collecting owed taxes from multiple land owners that illegally claim exemptions? Isn't it unfair to the school system and state funds that some large land owners pay 2% in late fees on delinquent property taxes when they make 3 or 4 per cent putting the money elsewhere in CDs and then pay the fine and still make a profit?

We better wake up and make them improve the cash flow in the county instead of using the rainy day fund or at some point, raising our sales tax or property taxes even more.

Larry and Sharon Zini

Truth Sayer said...

Larry and Sharon,

The Legislative Research Department is at the service of the legislature. They do not have to beg for information from the Counties.

So your assumption that the Counties are not cooperating "with Gage and his Staff" is just plain BS. Although I do not doubt for one moment that Froerer has made that claim. Truth is, if Howe and all the Legislative Research Staffers do not preform and gather the information asked of them, they lose their jobs eventually.

And Counties know that information requests from them carry basic subpoena weight and it would be insane to not cooperate with Legislative Research and legislators who can and frequently do help the Counties.

Gage is a lapdog of the Realtor and Developer Lobby. His previous actions and inactions, votes and bogus proposed bills prove it. Most if not all of his "bills" are actually written by Cris Kyler and Brian Kohler and Michael Ostermiller, all lawyers and lobbyists for the Utah Realtor Association. Wake up and understand you are being played and taken as fools.

If you want some real ammunition about lack of property taxes being collected, speak with Doug Larson in the Weber County Assessor's Office. Better yet, call Denny Lydle, in the Utah Tax Commission Office. Ask him how many are assigned to audit Greenbelt property claims in the entire State? ONE!

Consider the abuse of the Greenbelt laws. The really big money not being collected is in long time or "legacy" property owners who are sitting on large tracts of acreage.
Although not currently being (and have not in the past forty years or more) used for "crop production" they (the owners) have legislated and bent the Greenbelt laws. So much so that the original intent no longer is being observed. They literally have passed legislation making it possible to claim fallow land as Greenbelt (and thus only assessed at 8 to 15 cents an acre) based upon its "agricultural potential" as determined by some USU agricultural soil analysis. Notice that no corp production need be necessary. Greenbelt was originally designed to protect farmers and/or ranchers who could not remain competitive if their land became surrounded by high value developments and thus much higher property taxation, based upon comparative fair market values.

True enough; should the land be sold, the property taxes which would have been based upon actual fair market value (without Greenbelt massive discounts), will be paid by the buyer ultimately, going back five years. But what about the tens to hundreds of millions in property tax revenues not collected for the generally 10 to 20 years or more while the owners sat on valuable land (truly owner and frequently speculative investment land, being held by developers or an LLC)?

All the while, you and I, and every residence is carrying the property tax loads for these people abusing Greenbelt original intent. The developer majority in the legislature, led by the URA, not only protects these tax scofflaws, they actively participate in getting them elected (as was done for Froerer for example). And they, in turn pass asenine laws, like "making pleasure horses" legal excuses to claim Greenbelt exemptions. Froerer is only one of many, like the MacKay's and their extended family members, who are and have continued to use "the system" to get you and me to pay property taxes and for the education of their children and social services, safety, and infrastructure upgrades and maintenance, etc. We are paying for every tax scofflaw indeed, but lets focus on the biggest abusers of "the system" first and foremost.


There is where the developers and Greenbelt cheats who actually are using laws they have customized to their favor (including Froerer by the way) are taking us all to the cleaners. And the property taxes they get by with stealing (or as they say "shifting" to residents and private residences) make your unpaid property taxes through delinquency seem like a few pennies versus hundreds of millions (billions Statewide) of dollars.

Denny Lydle (sp? might be Liddle) will tell you, for example, that it is Commission policy (no doubt dictated by legislative pressures on the Tax Commissioner, his boss) to send a written letter to property owners announcing their (the tax commission, him in other words) intention to audit their Greenbelt Property. "Frequently, when I get there of course I find a couple of cows or a horse or two have been hastily moved onto the property very recently. I know this because the manure is fresh and there are no signs that animals have been there for very long." Denny is the only one in the entire STATE of UTAH who is charged with policing Greenbelt. Wonder WHAT THAT IS ALL ABOUT?!!

COME ON Larry and Sharon and PEOPLE, wake up to the real world in Utah! This is one of the major reasons why the large families, who pay less in property taxes, are being subsidized by residential Joe six pack and Riley Retired couple.

Do the research. In Ogden Valley alone, you will see that the MacKay's and their extended family members, for example, are paying just about 8 to 15 CENTS per acre in property taxes. And Froerer and his pals, like the MacKay's, have made "pleasure horses" legal excuses for claiming FAA Farmland or Greenbelt. We do not eat horse meat yet in this Country, although if good honest (but naive) folks like yourselves, continue to support and make excuses for the likes of Froerer and his pals, we all will be having to dine on horse meat soon enough.

One who nose said...

Hogwash, "Truth Teller." Greenbelt exemptions are intended to promote the rural character of areas like Ogden Valley and to prevent developer encroachment - period.

Larry and Sharon Zini said...

Truth Teller- The information is not based on what Gage Froerer told us, it is based on our own access to county records. If you have the parcel number, anyone on line can access property records and determine if the property taxes are delinquent. It is clearly highlighted on the record. If it takes more employees, to enforce collections, so be it. They could easily pay additional salaries with the tremendous revenue that would be collected if our County officials would just do something!

scam catcher said...

Larry and Sharon are right, we spend all of our time going after the "Big Picture", lets go after Weber County first! Let's make Weber County the tightest ship in the state for delinquent tax collections. If we can bring along other Counties, fine. It is up to the chief executives in Weber County to look out for all the other taxpayers by ending this practice of late payments and illegal use of the primary residence exemption.

Truth Teller said...

To: "the one who nose", and for those who wish to know the truth...

There is absolutely nothing...notta in the Utah FAA or Greenbelt statute which is "....intented to promote the rural character of areas like Ogden Valley and to prevent developer encroachment - period." as you claim.

From the Statute:
"The Utah Farmland Assessment Act (FAA, also called the Greenbelt Act) allows qualifying agricultural property to be assessed and taxed based upon its productive capability instead of the prevailing market value. This unique method of assessment is vital to agricultural operations in close proximity to expanding urban areas, where taxing agricultural property at market value could make farming operations economically prohibitive.

How is productive value determined?
Productive values are established by the Utah State Tax Commission with the assistance of a five-member Farmland Assessment Advisory Committee and Utah State University. Productive values apply statewide and are based upon income and expense factors associated with agriculture activities. These factors are expressed in terms of value per acre for the various land classifications.
How is land classified?
Land is classified according to its capability of producing crops or forage. Capability is dependent upon soil type, topography, availability of irrigation water, growing season, and other factors. The County Assessor classifies all agricultural land in the county based on Natural Resource Conservation Service Soil Surveys and guidelines provided by the Tax Commission. The general classifications of agricultural land are irrigated, dryland, grazing land, orchard, and meadow. If you disagree with your land classification, you can appeal to your county board of equalization for reclassification.
Private farmland can quality for assessment and taxation under the Farmland Assessment Act if the land:

• is at least five contiguous acres in area. Land less than five acres may qualify where devoted to agricultural use in conjunction with other eligible acreage under identical legal ownership. Land used in connection with the farmhouse, such as landscaping, etc. cannot be included in the acreage for FAA eligibility.

• is actively devoted to agricultural use, and the operation is managed in such a way that there is a reasonable expectation of profit;

• has been devoted to agricultural use for at least two successive years immediately preceding the tax year in which application is made; and

• meets average annual (per acre) production requirements.

So "the one who nose", you'd be better served knowing the truth instead of making utopian Green assumptions about the most abused and misused and costly property taxation in Utah. Hundreds of millions are not collected thanks to folks who are simply too simple to understand what is happening to them and why.
I've cited my references. Who is your's? Harry Reid? or is it some local jerk who has profited for decades off not having to pay fair market value taxation thanks to the upper crust of the Mormon Mafia? Please share...

Truth Teller

lionel said...

Truth Teller

It is pretty amazing how otherwise regular intelligent folks around here fall hook line and sinker for the bait put out there by Froerer and his ilk in the real estate hustle world. The greenbelt exemptions that benefit these dealsters directly are much much bigger sums of money than is realized by the very few people who actually own more than one house and may benefit from getting the 40% exemption on their taxes. How many people do you know in that category? Most of the people I know that own more than one residence are real estate hustlers and speck builders who all now seem to have their mammary glands caught in the ringer. Are those the people these proposed laws are targeting? If so, good luck on getting that passed in Utah where the legislature is the very best that real estate money can buy.

On the other hand I do believe that a great deal of the remaining "pastoral" elements of the Ogden Valley and other parts of Utah would be lost pretty quick without the greenbelt exemptions. If a farmer had to pay full on commercial tax rates for his pasture land how long could he possibly hold on to it? There ain't that much money in working the land any more - unless you're a large corporation with a pile of loop holes and subsidies you can hide behind.

Seems like land around here is either taxed at the "home owner reduced rate" which limits the land to an acre each I believe, or at a "commercial" rate that does not differentiate between somebody's back two acre pasture and a prime two acres on the busy corner down the street.

I find it hard to see where a farmer, or large 2 to 5 acre home owner, should be paying the same property tax on his acreage as the real estate developer does. One property is in play and the other is not. Seems that the green belt laws do have good intent, but as usual the real estate hustlers and their bestest buddies in the Legislature have created the angles and are exploiting them.

Some things never change, greed chief amongst them.

ozboy said...

Larry and Sharon

Thanks for all your efforts toward better and more fair government.

I would like to point out a slight error in your thinking regards the 2% penalty for not paying property tax on time -vs- the "3% or 4%" that people make on that money by not paying on time.

The 2% is a penalty, not an interest. The penalty covers the 1st of December through the 15th of January I believe. That is a month and a half. After that time another actual interest rate gets applied to the outstanding balance owed (including the 2% penalty). Meanwhile the 4 or 5% you state is a yearly interest which comes out to a third to half a percent per month. I don't think any one is going to make a lot of money this way by not paying when due.

Do you have any accurate info on just how many people are claiming residence exemptions when not qualified to do so? How much money is actually involved? Is it cost effective for the county to pursue this? Could that be the reason they don't respond to your requests? or is it political as others here have suggested?

disgusted said...

truth sayer / truth teller
thanks for your insight and research.

Truth Teller said...

Ozboy ent al,

The poor dirt farmers here in the Ogden Valley simply do not exist anymore. They keep a few head of cattle or sheep in order to qualify for the excessive Greenbelt exemption (pennies per acre) in order to hold onto the land either as their retirement or for their kids someday.

And of course there is the owner of Ski Lake Estates, Two Rivers, Earl Holding, etc. who have the weeds (they call it hay) cut and baled every other year or so and then just generally leave it in the fields in order to "qualify" for Greenbelt exemptions.

Meanwhile, Ada W., living alone on her social security and aged 94 years young, is being charged $1,600 (based upon $150,000 for a 3/4 ac. lot) for her tiny 800 sq. ft. house (assessed at $220,000) sitting on 3/4 of an acre.
And the McKay's, Froerer's, Catenzano's, etc. are paying 16 pennies an acre (Greenbelt) subsidized by residents young and old from all over Weber County (includes Ogden). On 226.53 acres, for example, McKay is paying only $36.51 in property tax. (re parcel search property # 21-012-0001). This is the magnitude of the fraudulent abuse of FAA (Greenbelt) legislation.

It is unspeakably unfair and unjust as well as illegal, but they get away with it year after year.

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