The Tooele City Council approved a $23.2 million tentative general fund budget during its meeting Wednesday night, which will be finalized following a Truth-in-Taxation hearing in August.
The total tentative budget approved for all funds, such as sewer, water, and solid waste, is $59.8 million, according to Tooele City Finance Director Glenn Caldwell.
The most significant change from the tentative budget presented by Tooele City Mayor Debbie Winn in May is the exclusion of a judgment levy tax, which would have been used for yearly payments on the remaining $11.2 million from the Tooele Associates lawsuit, settled in 2014. The City Council opted to use money from the city’s fund balance instead of the judgment levy tax to make the $401,772 payment, a move that Winn said she supported.
The judgment levy would have been an 8% increase on current property taxes. The owner of a home valued at $240,000 would have paid $440 in property taxes, plus $38 in the new judgment levy tax, had it not been removed by the City Council.
The property tax revenue in the budget is based around a certified tax rate of .003334, the same rate as the current 2018-19 budget. The certified tax rate used on the tentative budget was higher than the .003024 rate calculated by the Utah State Tax Commission.
The property tax rate for taxing entities are set based on the certified tax rate, which is calculated by the Tooele County auditor using a state-issued formula and certified by the Utah State Tax Commission. The certified tax rate is designed to enable the taxing entity to collect the same amount of dollars from property as the previous year, plus income from new property added to the tax rolls.
“The intent of it is that each taxing entity will receive the same property tax revenue that was budgeted in its budget last year, so there’s not much room for growth,” Caldwell said. “The only increase that the entity would receive would be new growth, new development.”
By sticking with the higher tax rate from the 2018-19 budget, instead of the certified tax rate, the city is expected to generate an additional $492,000 in property tax revenue in 2019-20. If the city used the certified tax rate provided by the tax commission, it would only generate an additional $139,000 in revenue.
If the city chose to use the certified tax rate, it would be a 9% tax rate decrease for city residents. The City Council voted to approve an 82% tax increase last year, in part to fund a new police station that is now under construction on Garden Street behind Tooele City Hall.
During the 5 p.m. work meeting, City Councilman Scott Wardle said he believed the public preferred to increase the city’s property tax revenue by holding the tax rate firm.
“As we talked through all the budget hearings last year, that was the public sentiment,” Wardle said. “They would rather have it stay at that same rate and grow, versus coming back and hitting them in 20 years.”
The City Council emphasized the adopted tax rate would be the same as in 2018-19 during both meetings, but the increase from the certified tax rate requires the City Council to complete the Truth-in-Taxation process. As a result, there will be a public hearing on Aug. 7 following public notification required by state law, prior to the City Council approving its final budget for 2019-20.
No one spoke during a public hearing on the tentative budget or the proposed tax rate during Wednesday’s meeting. Both the tentative budget and the proposed tax rate were approved unanimously by the City Council.