Fascinating article in this morning's Salt Lake Tribune, reporting that Ogden home boy House District 9 State Representative Neil Hansen plans to offer a bill in the 2009 legislative session which would drastically change the basis of Utah property tax valuation. We incorporate the key paragraphs from this morning's Cathy McKitrick story below:
Outrage over skyrocketing property taxes in some counties have fueled months of discussion over how to improve the current valuation system.Predictably, this idea is going over like a lead balloon amongst real estate development interests, as 30 year veteran real estate broker/ Leg District 8 House Representative Gage Froerer suggests in his quoted comments. The passage of a true "acquisition cost" property tax formula would certainly serve as a disincentive to new home buyers, and would also operate detrimentally to the interests of Realtors and developers.
While several fix-it bills are on the table, Rep. Neil Hansen, D-Ogden, proposes a major change: basing property assessments on purchase price instead of the assessor-determined fair market value.
"I've always felt the price you pay for the home is its actual value," Hansen said.
While some say such a change would require a constitutional amendment, Hansen believes the bill could be worded to avoid it.
His yet-to-be-drafted proposal would signal a significant shift. So far, it has gained little traction on Capitol Hill.
"I know there will be entities that come out against it, but I feel the discussion needs to happen," added Hansen, recently elected to his sixth term in the House. "We see people being taxed out of their homes."
In Hansen's thinking, the change would not only simplify the massive county-by-county assessment process but would also help homeowners live within their means.
And at first blush we also wonder how taxing authorities would handle the transition, when owners of more newly purchased properties would suddenly experience that nasty tax bill sticker shock which would inevitably come from the adoption of a "acquisition cost basis" property tax system.
On the bright side, as Rep. Hansen suggests, his proposed change in the state property tax valuation formula would be an incentive to help homeowners live within their means.
Moreover, here's something Rep Hansen fails to mention: An acquisition cost based property tax system would operate to promote that warm and cozy "family-oriented theme" which Utah legislators ALWAYS trot out in their election brochures. It would protect the interests of those family cantered property owners who've made lifelong commitments to their homes and families in their local communities, and penalize property owners whose investment in private residences is merely another short-term "investment decision." Read between the lines: It's about FAMILY VALUES, folks!
For those interested in digging in further in re this issue, we'll link to a site which provides a nice overview and discussion of the competing market value and acquisition value approaches, along with alternate informational links and other online goodies:
• UTAH PROPERTY TAX REFORMAnd for a discussion of the merits of an existing acquisition value property tax system, the obvious "go-to guy" is Howard Jarvis:
• Proposition 13 Has Made Everyone's Property Tax ReasonableAs for us at Weber County Forum, we're still sitting on the fence. We see plenty of fodder for discussion nevertheless. Hopefully, the posting of these above articles will provoke some discussion on this topic.
A hearty Weber County Forum Tip O' the Hat to (homeboy) Rep. Hansen, BTW, for bringing this new tax plan to the forefront, while my pals from the GOP party are still running around in circles, and appointing committees upon committees to study the property tax issue.
Who will be the first to speak out?
