Tooele City plans to add $5.5 million to the general fund for the 2018-19 fiscal year by increasing its tax rate by 114 percent.
Last year’s payment on a residential property with a taxable value of $240,000 was $242. If the tax increase is approved, that total would jump to $519, an increase of $278 for the year or $23 per month, according to information from the Tooele City Finance Department.
Last year’s payment on a commercial property with a taxable value of $500,000 was $916. If the tax increase is approved it would jump to $1,968, an increase of $1,052 or $88 per month.
Tooele City Council members indicated they would approve Mayor Debbie Winn’s proposed budget and tax increase during a work meeting last Wednesday.
Tooele City has not raised its tax rate for 36 years, according to the mayor.
A public hearing is scheduled for June 20 to adopt the proposed tax hike. However, the proposed tax hike and budget won’t be finalized until after a truth-in-taxation public hearing on Aug. 15.
“Nobody wants to do this,” Winn said on Monday. “For the past several years, we’ve had a budget deficit just to pay the regular bills.”
Earlier this year, Tooele City’s finances were analyzed by financial planning consultants Lewis Young Robertson & Burningham, Inc. of Salt Lake City. The firm concluded that the city’s long-term financial viability was unstable without significant revenue changes.
Of the proposed $5.5 million increase in revenue, about $1.1 million would be for payroll adjustments for city employees.
“Almost $800,000 of that amount is for public safety employees including the hiring of two new police officers, two part-time community service officers and additional money to the police over-time budget,” Winn said.
The budget includes a 2-percent cost-of-living increase for the general workforce, step increases, career ladder promotions, and insurance payment increases, according to information supplied by the City.
The increase in tax revenue for the fiscal year beginning July 1 would mean $678,408 for a tax shortfall, $458,364 toward building a new police station, $300,000 for equipment and $403,522 toward paying off a lawsuit judgment.
The mayor said the original judgment levy on the lawsuit was $22.5 million, but has been paid down to $11 million. The tax rate will decrease once the judgment levy is paid off, she said. The lawsuit is the Tooele Associates case that was settled in 2014.
Tooele’s tax rate has decreased over the past five years while the value of taxable property has increased. The certified tax rate is adjusted each year by Tooele County to make the amount collected from property tax the same year after year plus a little more for new growth, according to the mayor.
She said the revenue has remained about the same, but income has not been sufficient to cover the increased cost of paying for services provided by the city and to match inflation.
“It’s a real difficult game to play and that’s why for 36 years we tried to live on what we could and we did do a good job,” the mayor said.
Tooele City will not build a new fire station on 1000 North for now, but will move forward on a new police station east of City Hall.
For comparison, most of the property tax paid by Tooele City residents goes to the Tooele County School District. Last year’s district tax rate was set at 0.009122 compared to Tooele City’s 0.001938, according to figures supplied by Tooele County Clerk/Auditor Marilyn Gillette.
“We’re doing the best we can to keep our citizens’ taxes as low as we can,” Winn said. “We are not asking for anything frivolous. I have been involved in some of the meetings for the new police station and we are not building a Taj Mahal. We are just building for function for the least amount possible with nothing extravagant.”