Salt Lake City’s proposed property tax increase would help officials keep up with demand, the mayor says

Mayor Erin Mendenhall says the 4.9% increase would help strengthen the city’s workforce and address other needs. Taxpayer advocates worry about timing when inflation spikes.

(Francisco Kjolseth | The Salt Lake Tribune) Salt Lake City City Hall in 2021. Mayor Erin Mendenhall is pushing for a property tax increase to expand the city’s workforce.

Rising costs and rising demand for services are prompting Salt Lake City Mayor Erin Mendenhall to propose the Utah capital’s first property tax hike in eight years.

Mendenhall asked the City Council earlier this month to increase the city’s property tax rate by 4.9%, an increase that would apply only to the city’s share of the total tax bill paid to Salt Lake County.

Mendenhall said in a telephone interview on Thursday that city governments had adapted to the growing needs of an urban center with a growing population, but that capacity was being exhausted.

“After so many years of stretching and reaching,” Mendenhall said, “we must expand our organization to meet these real and enduring needs of our residents.”

If approved, for a Salt Lake City home with an average price tag of about $520,000, property taxes would increase by about $130 per year.

(Rick Egan | The Salt Lake Tribune) Mayor Erin Mendenhall, pictured in early May, says a tax hike is needed to meet the city’s growing service needs.

Because the money from a tax hike would go into the general fund, Mendenhall said it could ultimately help fund city initiatives like affordable housing or transportation improvements. But the priority, she said, is expanding the city’s staff to better serve residents.

If approved, the tax increase would add nearly $4.4 million to the general fund and help pay for 110 new employees across departments.

Rusty Cannon, president of the Utah Taxpayers Association, said his organization is still reviewing the details of the proposal and why the city thinks it’s warranted, but wondered why officials would seek additional tax revenue when residents are already grappling with skyrocketing inflation had.

“Increasing taxes this year, even by a modest amount,” Cannon said, “seems very short-sighted.”

And with Salt Lake City and other municipalities seeing an increase in sales tax revenue, Cannon said he doesn’t understand why the city is vying for more money through property taxes.

“If you were to review Salt Lake City’s budget, you could easily find many areas to cut or eliminate spending,” he said. “We believe that an honest look at the overall budget would provide the savings needed to manage things with ongoing revenue and not have to collect taxes.”

Mendenhall has said the demands on the city simply exceeded the additional revenue officials have seen from sales taxes. And the city, like its residents, is grappling with rising costs as inflation depresses pocketbooks nationwide.

“The city government,” she said, “is in no way immune to the same impact we are feeling as homeowners and renters in the city.”

Mendenhall said the city is encountering higher labor costs to retain employees in a competitive job market. The mayor’s proposed budget includes base pay increases of 3% to 4.5% for city employees and market adjustments totaling approximately $2.3 million from the general fund.

The property tax proposal, stresses Mendenhall, is not a response to the recent jump in inflation or a pandemic-related economic shock. The aim is to address the long-term increasing demands on the town hall.

The mayor said it’s better to absorb a relatively small property tax hike now than wait and make residents swallow a steeper rate hike in the future. She said she hopes the additional revenue would enable Utah’s capital to meet the needs of residents and avoid another significant increase for years to come.

The city council must pass a city budget by the end of June. If the final budget includes a higher property tax rate, the city will hold a tax truth hearing in August. Salt Lake City’s proposed property tax increase would help officials keep up with demand, the mayor says

Joel McCord

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