A Discussion About Property Taxes

A Discussion About Property Taxes
Posted on 08/01/2018

Cottonwood Heights City Council

The City incorporated to create a sense of community pride, maintain local control and deliver services such as fire, police, public works and planning. As we strive to provide the best service possible, property owners in Cottonwood Heights recently received information that the city is proposing a property tax increase. In an effort to provide information to citizens, we would like to share some general historical background of city finances (see below).

taxExpenditures for salaries and benefits are for city employees and contracted services for attorney, engineer, building inspection, fire, sheriff (during the 2005-08 contract period), public works. Transfers from the General Fund to the Capital Fund are generally done to fund road projects.

Since incorporation, consumer prices have increased by 25.2 percent. City expenses are likewise impacted by inflation. The largest impact on the budget comes in the form of increased wages and benefits for employees. To attract and retain a good city staff, we have to keep pace with the marketplace.

Property taxes and many other revenue streams do not automatically increase for inflation. Likewise, inflationary adjustments are necessary with the vast majority of city funds going toward wages and benefits to those providing city services. The outcome is that eventually the expenses will exceed revenues. What this means is that over time, the nature of the city funding model requires a city to either increase tax revenues or reduce services.

We started the 2018-19 budget process by identifying approximately $1 million in efficiency efforts and reduction of services. We also identified numerous other areas where service reductions were possible, but we did not believe that these reductions were appropriate. Additionally, we identified a few areas where we believed that we needed to increase expenditures. We determined that some employee compensation and benefits needed additional money to remain competitive in the employment market. These efforts were guided by citizen comments, market study information, and recent citizen surveys.

Earlier this year, the city completed a comprehensive review of all roads within the city. The results of that study verify a significant need for additional spending on city roads. Our 2018 budget transfers an additional $500,000 to the Capital Projects fund.  This money is primarily dedicated to improve the condition of roads in the city.

In fiscal year 2015, the city made the decision to own rather than rent our city hall. An analysis demonstrated that while leasing a building was less expensive in the short term, our cost of owning a building was projected to grow at a much slower rate and would have a greater long-term financial benefit to the city. Constructing City Hall with additional meeting rooms and a gathering space has given citizens more opportunities to use it, as well as providing a sense of place in the city.

The proposed tax increase is estimated to raise property taxes on the average home assessed at $431,800 by $7.98 per month/$95.71 per year (for example, the annual city tax would increase from $437 to $532). We were required by law to pass a proposed budget before June 22 and then schedule a public hearing on Aug. 14 where citizens can voice their opinion for or against the proposed increase (an open house will also be held on Aug. 14 from 5-7 p.m.).

This public process is strictly outlined by state statute and ensures that residents and property owners have time to review the proposal and speak in a public meeting before a vote is taken sometime before the end of August. At the time of this vote, the City Council can choose to adopt the full tax increase, pick a tax rate that is below the full amount, or choose not to increase property taxes.

If you own the average home in Cottonwood Heights, you will pay a total of $532 in annual city property taxes if the full increase is adopted. Consider what you get for your tax dollar — having police and fire service within minutes of a call; public works repairing and plowing our roads year around; a variety of parks, trails, and open spaces; and many other municipal services that contribute to the quality of life in Cottonwood Heights.


Mayor Michael J. Peterson, Council Members Michael Shelton (District 1), J. Scott Bracken (District 2), Tali C. Bruce (District 3), and Christine Watson Mikell (District 4)