Government 101: the budget processJul 22, 2021 11:42AM ● By Erin Dixon
By Erin Dixon | [email protected]
You (or your landlord) pays property tax every year, whether on residential or commercial property. There are several taxing entities that collect from what you pay, from the mosquito abatement, to the local school district.
The city only collects a small portion of that tax.
Residential properties pay only 45% of their property tax value, while commercial pays 100% of the value.
In Utah, a city’s yearly property tax income is a fixed number. This means that unless the city changes its tax rate, the city will only receive the dollar amount that it received the previous year. If a city receives $20 million in 2019, it will receive $20 million in 2020, even if property values increase. This requires a city to consistently communicate with its residents its financial needs.
“The county auditor takes the previous year's revenue we received, adds any new growth, and they divide that by the assessed property tax value. If the assessed value goes up the tax rate goes down,” Midvale Assistant City Manager Kyle Maurer said. “When the assessed value goes down, the tax rate goes up. This provides a steady income for the city.”
Budget information is public and available on every city website. The budget contains the cost for everything a city pays for, from road salt for plow trucks, employee salary, computers, website maintenance, first responder salary and ambulances, and much more.
The budget is prepared by the city’s finance department, and, depending on the form of government, either the mayor or the city manager.
Each department asks for what they need, but the mayor/city manager makes the final decision on who gets what.
Some cities involve the city council in the budget process, asking for council priorities in budget retreats or workshops in council meetings. Some cities prepare the budget and ask for council opinion when they present the tentative budget. The tentative budget is posted to the city website and presented to the council in May, which gives council and the public a chance to comment and suggest alternatives.
A budget must be finalized and accepted by the city council by June 30 before the new fiscal year begins. (A city’s year runs from July 1 to June 30, known as a fiscal, i.e., financial, year.)
“If the council does not adopt a final budget by June 30, then the tentative budget would become the budget,” West Jordan communications officer Tauni Barker said. “If they had not adopted a tentative budget, then it would default to the mayor’s proposed budget.”
If the mayor does not approve of the budget that council passes, they can veto. Sandy’s Mayor Bradburn vetoed a line item in 2020. (https://www.sandyjournal.com/2020/06/29/319675/sandy-mayor-s-veto-preserves-pay-raises-for-city-s-first-responders-and-other-employees)
If a city decided to change its property tax percentage, a Truth in Taxation meeting is required. Salt Lake County decides the date of the Truth in Taxation so no two taxation meetings fall on the same date. The Truth in Taxation is a public meeting, all residents are invited to read the proposed budget and give comments before a final decision is made by the council.