FAQ - FY2018 Budget
Why is the Council considering maintaining the existing property tax rate?
Maintaining the existing rate would increase revenue by $808,389, allowing Ogden to fund currently unfunded essential services. For FY2018 alone, the City is nearly $300,000 short in funding a fully staffed police force, $400,000 short in covering facilities expenses, and thousands short in funding trails, parks, fire, and planning. This is due to a loss of buying power.
We have all personally experienced the effect of inflation; $20 does not go as far as it did 20 years ago. This is an even greater issue for cities because Utah’s property tax structure prevents municipalities from automatically adjusting revenues to address the impacts of inflation. Property tax is designed for revenue neutrality, meaning that the revenue the City receives stays the same every single year, with some adjustment for new growth.
For example, if Ogden generated $10 million in property tax revenue last year, the State Tax Commission would use their models to adjust the rate to generate $10 million for this year, plus new growth. As values increase, the property tax rate proportionally decreases.
Because property taxes are fixed and do not account for inflation and because Ogden went without an increase for more than 30 years until last year, the City is three decades behind in adjusting for inflation. This is not sustainable.
How much would the proposed property tax increase affect my tax bill?
The advertised 7.2% increase is not a 7.2% increase in the total tax bill. It may not even be a 7.2% tax increase to Ogden City’s portion of the bill. It is a 7.2% increase over the certified tax rate to maintain the current rate. On a $167,000 home, that equates to less than $20.
The FY2017 Budget was $199 million, and the FY2018 Tentative Budget is $184 million. How has the budget decreased, despite an increase in property taxes?
The $199 million total in FY2017 and $184 million total in FY2018 represent the combined total budgets for Ogden City, the Ogden Redevelopment Agency, and the Municipal Building Authority. The City’s budget was $180 million in FY2017, and the FY2018 budget, as proposed, is $166 million. In FY2017, the City issued Water and Sewer bonds in the amount of $17 million, which were accounted for as one-time revenue. If the FY2017 budget is adjusted for the bond revenues, there is actually an increase in the City’s FY2018 budget. The City’s General Fund—where all tax revenues are deposited--increased 2.45% in FY2018.
Ogden’s tax rate is already among the highest in the state. How can the City justify a property tax increase?
It is true that Ogden’s tax rate is the third highest in the state – behind Salt Lake City and West Valley City. However, the average home value in Ogden is significantly lower than most other cities in the state. It costs, on average, $167,000 to purchase a home in Ogden; whereas, the average home in Centerville is worth $261,000. It costs the City the same amount to provide essential services, such as police, fire, and water, to a $167,000 home as it does at $261,000 home. Ogden’s tax rate is higher to help adjust for that difference.
Additionally, larger cities have more expenses than smaller cities because they offer more amenities and have more residents and visitors using their services. Maintenance costs increase with the higher use roads and facilities, there is more demand for public safety, and more money is spent on recreation and staffing to support events and amenities.
How much of my property tax bill does Ogden receive? Where does all of the money go?
Ogden only collects about 18% of the total property tax bill.
More than half of property taxes go to the Ogden School District.
Weber County collects about the same proportion as Ogden City.
The remaining 11% dispersed amongst Central Weber Sewer, Weber Basin Water, Weber Area Dispatch 911, Mosquito Abatement, and Weber County Assess and Collect.
Most of the key changes highlighted in the budget involve salary increases. Didn’t the City do this last year?
Employees responsible for performing Ogden’s essential services. Employee compensation accounts for almost 85% of the total budget, so it is an important consideration in the budget approval process. The most significant element of last year’s budget was the implementation of step pay plans for police and fire employees to better enable these crucial departments to recruit and retain employees in a competitive market. It also provided for merit increases for general City employees, but didn’t address the issue that general City employees went several years without any increases. Retaining good employees saves the City money in the long run, so it is important to take care of our employees, whether they are police officers and firefighters or the employees who manage our water, garbage, records, planning, and growth.
I’m sure I can find $800,000 somewhere in the budget that isn’t being well-spent. Why can’t you do what the rest of us have to do when times get tough and tighten your belt?
Municipalities operate under generally accepted governmental accounting principles. Much of the City’s revenue is restricted to specific uses and not available to cover shortfalls in the City’s General Fund where the City’s essential services are funded.
Council members and staff have spent the past several months, including several late nights, going through the Mayor’s proposed budget. We have been making adjustments to the budget during that time and will continue to do so until August 8th. We rely on your feedback to make these difficult decisions and encourage you to go through the budget if you have the time and desire.
It is incredible how tight the budget is and how well our employees are able to stretch a dollar. However, we must fund our essential services such as police and fire. We can only delay funding for so long. As an example, you may choose not to get your car serviced during tighter times. As the years go by, if you fail to service your car, the resulting damage to your car will catch up with you and the costs may be greater than if you regularly serviced your car. In the case of the City, the largest shortfalls are with police and facilities. Kicking the can further down the road in these areas may result in even greater costs.