I am not suggesting that we do away with truth-in-taxation. If a taxing entity wants to increase revenues within the current year's inflation, they will still be required to hold a public hearing. However, if they want to increase revenues beyond the current year’s inflation, it will require the vote of the people.
It has been suggested that it would be a burden on taxpayers to be required to vote on tax increases. I submit that the burden is only a fraction of the burden that people are experiencing from increasing property taxes. I also submit that taxpayers are far more reluctant to vote for a property tax increase as opposed to a sales tax increase. The vote of the people is a logical check to the property tax problem.
Two significant problems with our current property tax system became apparent in the Revenue and Tax Interim committee on Wednesday. First, there are some deficiencies in the ways that County Assessors are appraising properties. Some counties are doing it better than others, but there definitely needs to be improvement. Our constitution requires that the distribution of the property tax burden be done on a basis of fair market value. There are many who argue that it should be based on acquisition value. While the fair market approach is not perfect, neither is a system based on acquisition value. There are winners and losers under both methods. I suspect that most people will argue for the system that treats them best.
The other problem is the tax revenue increases that taxing entities are implementing through truth-in-taxation. I believe this to be the biggest problem. How we value property only distributes who pays the taxes. It is tax increases that determine the amount. I would like to fix this by requiring taxing entities to take any tax increase above the current years inflation rate to a vote of the people. Truth-in-taxation hearings are not well attended and often misunderstood. However, a vote of the people is more engaging and transparent. With a voting requirement, the people decide whether taxes are increased.
Here are some pictures of Wednesday's hearing. I appreciate all those who attended and shared their point of view.
The Hinckley Journal of Politics (2007, Volume 8) recently published my article entitled: Sales Tax and Land Use: Are Cities Being “Driven to the Mall?” You can read the entire article here. homogeneity
"In 1999, citizens in part of unincorporated Salt Lake County, Utah were forming the city of Holladay. As they were deciding the boundaries for the new city, they considered the tax revenues that various properties would bring to their city. They could include the Cottonwood Mall, a traditional anchored shopping mall, and/or Cottonwood Corporate Center, a large state-of-the-art, mid-rise office complex, which is a hotbed of high-tech companies located near upscale residential areas where executives for such companies might tend to live. Holladay chose the mall over the office park because of the tremendous sales tax revenue the city would reap from it (Linton, 2004). Holladay would have gained little on a net basis from including the office park in its municipal boundaries because the city does not participate in the significant personal and corporate income taxes generated there." (P.70.)
The article points out that cities have every incentive to develop retail stores which contribute few high-paying jobs, while they have almost no inducement to create job sites for technology and other high-paying jobs. Hello!! Why do we drive our cities to do the very opposite of what our state economic policy is?: to get high-paying jobs.
The other serious problem is that this heavy distortion toward sales taxes drives much of our land use decisions in this state.
"One wonders whether the citizens of the cities who have developed commercial/retail facilities for sales tax revenue are pleased with the result. Do they view retail and commercial development as necessary to finance a modern city? Do they enjoy large retail developments as providing desirable services and amenities? Do they object to their city’s change from a bucolic and identifiable town to a sprawling suburb with fast-food franchises and discount super-stores as their gateway? Has there been a consequent loss of Main Street businesses such as the hardware store, the local grocery, the diner, the deli and the barber shop, and have the residents noted and regretted this loss? Do they care that they now can’t tell when they’re leaving their town and entering the neighboring one? Do residents care that when most Wasatch Front cities are viewed at their freeway entrances, they are becoming indistinguishable from each other and from the suburban areas of Phoenix, Las Vegas and Southern California? Do they care that we are close to having the same McCity at every freeway off-ramp? Do they regret that suburban commercial development is almost exclusively auto-dependent, sprawl-type development? Do they care that the gateways to their cities and towns are no longer a tapestry of fields and pastures and unique older homes, but a predictable pattern of four-lane roads lined with big box retail, car lots and malls? Will they miss the ambience and connectedness of the traditional town with its smaller scales and the unique flavor deriving from hometown shops and stores and old buildings? Will there be any place to walk to anymore? Is it still possible for a ten-year old living in suburban Utah to ride his bike to his baseball practice or to get an ice cream cone?" (P.73.)
The article concludes:
"Like all rational creatures, city leaders respond to financial incentives. Utah’s municipal fiscal structure provides a strong bias in favor of cities facilitating regional retail development. Most of this development has been sprawl-type, auto-oriented retail and commercial facilities. Such development often comes at the cost of losing traditional Main Street-type businesses and the scale and flavor of the historic places from which these [cities] have grown. The economic development incentives applicable to cities are misaligned with the State’s goals of non-retail job creation and business growth. Cities’ fiscal bias towards retail development has worked against siting more industrial and office facilities in suburban locations, which has seriously increased commuting and its attendant public and private costs such as congestion, pollution, and highway capital and maintenance costs. The current municipal point-of-sale sales distribution formula is neither fair nor good policy. A new formula could protect cities that have invested in retail facilities, yet could begin to wean municipalities from over-reliance on sales tax dollars and even give them incentives to align themselves with State economic development goals by providing for more office, industrial and non-retail commercial development in their communities." (P.74.)
Currently, local option sales tax is about the only politically viable tool for Utah cities to increase revenues. Until we develop the political will to limit that dynamic we will continue to get more of what we’ve been getting–and it ain’t pretty.
Tomorrow, we're holding a public hearing on property tax in the State of Utah.
Wednesday, September 19th
Room W135 in the West Building, Utah State Capitol Campus
We're looking forward to hearing from citizens, County Assessors and other interested parties. Please join us, if you can - or or listen on-line. You can E-mail comments in advance to firstname.lastname@example.org .
Many parts of the State have seen unprecedented increases in property values. I strongly believe that the people of Utah need a property tax system that fairly distributes the tax burden and that effectively limits taxing districts from runaway spending. I have spent some time scrutinizing the way property taxes are handled in other states. Utah's system is not perfect but it is one of the best in the nation. I believe great care should be taken to implement sound policy changes. However, recent tax assessments have hit citizens very hard and there may be ways to improve the system.
I look forward to tomorrow's meeting and hope to hear some good ideas.
It's constitution day. I thought this little paragraph was worth reading one more time...
"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.... Done... the seventeenth day of September, in the year of our Lord one thousand seven hundred and eighty seven."
. . . and this was worth watching, just one more time. Enjoy!
We were sorry to hear of the passing of Cal Rampton. Even when you know the end of a life is approaching and have time to prepare, the passing of a loved one is sobering and sad. We'll miss him. But we won't lack his influence; his legacy on our state is too significant. Two weeks ago we announced that we are are naming the governor's boardroom in the new capitol building after Governor Rampton (link). I wasn't present when he saw the press release or the related news articles but I sincerely hope he is aware of our respect and gratitude. It's a small tribute, but highly appropriate. I think it's fitting that future groups, meeting in that room to negotiate state policy, will pass by Cal Rampton's name and have his example in mind.
All this began--as such things tend to--over a couple of drinks. I was having them with my friend from Yorkshire, Adrian Dangar, whose surname is only slightly misspelled. . . . I was telling him that I planned to go to one of the former Soviet Republics in Central Asia to write about how, or if, democracy is developing in a place with no democratic traditions. This seemed a safer way to investigate the question than going to Fallujah. I was wrong.
Eight months later . . .
A fellow named Djuman Kul, who looked like Genghis Khan and was wearing a felt hat as tall and amazing and elaborately embroidered as anything the Pope dons for Easter, was choosing my mount from a herd of wild Kyrgyz horses. They were wild enough, at least, that nobody had bothered to name them. I had been picturing something on the order of a shaggy little Mongolian pony that would let my feet drag reassuringly on the ground. But these horses were five feet tall at the shoulder. They were thin and boney-headed as fashion models but sinewy like a California governor left outdoors to eat grass all winter. And the horses were stallions, with Floyd Landis levels of testosterone. Like Floyd and Tour de France officials, they were kicking and biting each other.
Djuman Kul led the lone palomino forward. He told me in Kyrgyz, Shamil translating, "This horse is strong, but kind." I wish I had not overheard Djuman telling each of the other trekkers, "This horse is strong, but kind."
I dubbed the horse "Trigger" and hopped aboard. There is a trick to this. You turn the left stirrup backwards, place your left foot into it and, springing with your right leg, swing yourself up so that you...slam your whole body smack into the side of the horse. Shamil helped me up.
I had an excellent, if precarious, view of Kyrgyzstan. It looks like the American West. Not the dry-gulch Western movie American West, but the whole West--purpled mountain majesty, fruited plain, noble forest spires, canyons as grand as all get-out, packed into one place with about as much sign of human habitation as Lewis and Clark saw. (Sacagawea, please go to the satellite phone.) It would have taken my breath away if I hadn't been too scared to breathe.
Later, immersed in the Kyrgyz mountain landscape...
"I think," said Shamil, "when we die this is what we see."
Here's the full article. Minus the cool pictures. You'll have to buy the magazine for that, but it would be four bucks well spent.
Interestingly, at the end of the senate session (picts), President Valentine showed members of the Kyrgyz delegation pictures of Utah. They were appreciative of the red rocks of Zion, Capitol Reef and Escalante - but their eyes really brightened when they saw pictures of the forests, rock, and snow of the Uintah and Wasatch Mountains. "That's home," they said. President Valentine said that's my home too. Smiles all around.
Yesterday, we had the extraordinary honor of hosting fifteen people from Kyrgyzstan here at the Utah State Senate.
The Kyrgyz delegation is in Utah for a week to study America's political processes and the Rule of Law. Senators McCoy, Bramble, Dmitrich and I, along with Rusty Butler of UVSC, Representative Chris Herrod (who speaks Russian), and a few gifted staff replicated a legislative session and the Kyrgyz leaders played the part of Utah State Senators.
They debated a mock bill, followed parliamentary procedure, tried to amend the bill twice, and ultimately killed it. When it was time to adjourn, they voted NOT to adjourn. Apparently we were doing something right and they wanted to stay.
We had a great three hours. It was wonderful to spend time with good people from a part of the world beginning to find its way toward a stable democracy and self rule.
We hope they take something good with them as they return to their beautiful country. Wonderful people. We wish them the best.
The Framers didn't intend to create a city where American citizens were completely unrepresented. But this is the situation we have.
Some have called the D.C. House Voting Rights Act a novel approach to exercising the District Clause of the Constitution to provide representation for D.C. residents. However, the important research of individuals like Viet Dinh and Judge Ken Starr shows Congress first used that power to allow D.C. residents to vote in Maryland and Virginia between 1790 and 1801. Congress rescinded that right by statue in 1801. Furthermore, the courts have upheld Congress' treatment of Washington, D.C., as a "state" under many provisions of the Constitution. Sen. Orrin Hatch, Utah Republican and himself a constitutional expert, recently reaffirmed the constitutionality of the D.C. House Voting Rights Act.
The Framers stated that Congress would exercise "exclusive legislation in all Cases whatsoever, over such District... as may . .. become the seat of Government of the United States." The Framers did not tell Congress where to put the district. The Framers did not tell the Congress how to govern that district. The Framers simply empowered the Congress to do whatever it deemed appropriate, within the confines of the Constitution, to establish and manage the Federal District.
Some opponents claim a constitutional amendment is the only way to grant the citizens of the District voting rights. But the argument that a right granted by statute and rescinded by statute can now only be granted by a constitutional amendment fundamentally makes no sense.
As per usual, there is no mention of Utah or correcting the bureaucratic injustice that shortchanges our citizens every time a vote is taken in the US House of Representatives.
As many of our friends know, the First Lady of the Senate (Karen) and I are are members of the volunteer search and rescue team near our home. The Utah County Sheriff Search and Rescue was called this week to assist Provo City in looking for a lost BYU student, Camille Cleverly.
She was last seen by her roommates on Thursday, August 30th. When she did not come home that night, concern was raised, and the Provo Police started an investigation. Her bike was missing, but she took little else with her.
Friday morning, her ATM card was used to buy two fruit drinks at a C-store. It is presumed that it was her since a pin was used to complete the purchase. Provo Police continued to proceed as a missing person investigation, with little in the way of leads. Due to press coverage, a couple of possible sightings were reported, but they had her in various parts of the community. Nothing solid.
We became involved in the search on Tuesday afternoon, when the Search and Rescue Team was called out for an agency assist, to help search for her in various locations, including Rock Canyon, Slate Canyon, and the various trails around the base of the Mountains east of Provo. Rain and darkness terminated the search until the next day.
On Wednesday morning, the First Lady and our search dog – a smart, sweet german shepherd named Chickory - were again out looking for her. (click here, then click on the small picture below the two people embracing).
I was not able to go out that day – had to work. (Yes, I do have a "real job" as a tax attorney and my clients actually like to see me once in a while!) Still nothing, no leads, no real new evidence.
Then, the first lead: someone found the bike chained and locked at Bridal Veil Falls, in Provo Canyon. The trouble was, that indivudual cut the lock and took the bike Saturday night or Sunday morning, thus delaying discovery of this piece of the puzzle until Thursday when he finally went to the authorities.
I was working in my office Thursday afternoon, meeting with clients and trying to catch up with the paperwork of a tax practice. I had just taken my next appointment who happened to be the DPS helicopter pilot who was on standby for the search, when my cell phone rang. It was the sheriff's department, looking for the pilot and me, to see if we could "fly the cliffs", to look for anything that would help resolve this case.
We dashed to the Provo airport where the helicopter was tied down and immediately took off for Provo Canyon. The next two hours were spent flying slowly back and forth on the face of Bridal Vail Falls and then slowly flying down the Provo River. Still nothing, but we did locate a lot of potential search areas for the next day.
The next morning at 6:00 a.m., Chickory and I were out, scouring the oak brush around the mountains near the falls along with 11 other dog teams from Utah County, Duschesne County and Rocky Mountain Rescue Dogs.
Here is tonight's report on KSL. As of this writing, we still have no word on the whereabouts of Camille. She remains in our thoughts and prayers. We are thankful that so many people want to help. We are grateful for the strong community spirit in Utah, to see so many rally when the call for help goes out. Our sincere thanks to each of you for who you are and the support you give each other.
The Sutherland Institute just published a striking analysis of education systems, reforms, and battles from early Utah settlement to now -- offering historic context for the voucher discussion. The Sutherland Institute has come down in favor of Utah's Voucher Program, as have we, but hasn't lost sight of the need to build community and work together.
This is most interesting forty pages I've read all month.
"She served with energy and distinction in the legislature, quickly becoming a champion for education and social services. Widely admired and well-liked on both sides of the aisle, Karen led the way on many issues, becoming a prominent voice on legislation addressing seatbelt safety, hate crimes, and political ethics reform."
Good call. You could not have picked a more deserving individual. We miss her!
I was pleased to be appointed to the special task force to look at equalization of the funding for the school districts. I have worked on this issue for many years because of its impact, especially on the Cache School Districts where there are a growing number of children but the property tax base is so low because of the lack of business properties in the district. Also, much of the land is covered by green belt. By using property tax to equalize, it would have adversely affected Salt Lake County, which had more votes than the rural areas where the need was the greatest. We have helped address that problem with special funds (now two) that are given to school districts based on special formulas to help the neediest with capital need pressures.
I was opposed to the recent proposal that precipitated a special session. First, we were acting too fast without adequate input from the impacted districts. No matter how smart a plan is, it is always better to have input and buy in from the locals if you want their support with adjustments that inevitably come.
Second, while I favor equalization, I oppose using the current property tax. We have worked very hard to remove the State from the property tax revenues and let the districts who are elected and know their population handle that challenge. The “switch” proposed would have caused significant property tax increases in several of the districts. The districts that were in a position to receive this switched money would have been forced to lower their property tax.
Third, I did not feel comfortable with the way the equalization was being proposed. We do not just grant the WPU based on headcount. We have about 650,000 WPU for about 520,000 students because of the extra funding we give handicapped and at-risk students. Many of the Capital needs projects are not just buildings but computers for the at-risk students, who may not have computers at home. We need to allocate this equalization so as to make sure that we treat students fairly for their needs.
There are concerns that the current two funds to help needy districts with Capital needs must be adjusted to be fair. I know how hard “fair” is to accomplish. Capital needs are easy to claim and to justify unless we have to go back to the property tax payer and get their approval. They can be very cautious about what is said about need and force even the elected school board members to reconsider what they think needs are.
It should be challenging and interesting. We plan on having a recommendation for the upcoming session. I hope we find out that there is not more cake than frosting so that when the numbers are placed on the program, we can cover it.
The task force will meet several times over the next few months to study how we might provide equalization of capital funding on a statewide or countywide basis. Their final report, including any proposed legislation, will be presented to the Executive Appropriations Committee on or before December 19, 2007.