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Utah ranks 46th in the nation for effective property tax rates, according to the Tax Foundation. Yet this year, 59 cities, school districts, and other entities across the Beehive State are proposing increases—some as steep as 225%.
The median proposed rate hike is actually down from last year, dropping to 8.31% from 11.58%. But the eye-popping double- and triple-digit jumps are making national headlines. So what’s going on in Utah, a state known for its favorable tax policy?
Tax advocates say the answer is complicated. In some cities, leaders have put off raising taxes for too long—allowing revenues to dwindle due to rising costs and inflation—and now expect residents to shoulder painful spikes. Elsewhere, the hikes could be a sign of healthy fiscal policy, ensuring services are funded without death by a thousand cuts.
It’s a poignant lesson for municipalities across the country, many of which are grappling with budget deficits and growing backlash from tax-burdened homeowners: Delay tough choices too long, and the bill only gets bigger.
What’s driving the biggest tax hikes in Utah?
Southeast of Provo sits Wellington, a city of just 1,600 people, where residents are now facing the steepest proposed property tax hike in the state this year: 225.3%. For the owner of a $256,000 home, that would add almost $500 to the annual property tax bill, increasing from $216.41 to $704.
Mayor Jack Clark expressed in a town hall meeting that it would be a “tough pill to swallow” for the many residents on a fixed income. But the city hasn’t seen a property tax increase since 2017, according to city documents.
In the years since, inflation has steadily eaten away at revenues, draining city coffers. The tax increase would go a long way toward closing the city’s revenue gap, but it would still leave a $26,550 hole to plug. Without the hike, the city would face a $400,000 deficit.
And Wellington isn’t alone. In Uintah City, just north of Salt Lake City, officials are weighing a 100% increase. On a $619,000 home, the tax bill would double from $91.58 to $183.16 per year, according to city estimates.
Similar to Wellington, Uintah City hasn’t seen an increase in property taxes since 2012, and it’s faced a slew of rising costs since then, city council minutes reveal. Mayor Gordon Cutler, who’s held the office since 2018, acknowledges that taxes should have been raised more gradually instead of being delayed for over a decade.
The woes of Wellington and Uintah City highlight the same hard truth: When cities delay raising taxes for years, inflation doesn’t pause. Costs climb, revenues shrink, and homeowners are left to cover the bill all at once.
What about the double-digit bumps?
On Utah’s southwest corner is a city facing a much different kind of debate. After growing 61% in the past 15 years, the property taxes in Ivins have stayed the same. At least, until this year.
The 11,000-person city is currently going through the process of approving a 34% property tax increase to plug a $540,000 budget gap. That would mean about $122 more per year for the average homeowner.
“This isn’t necessarily a bad thing,” explains Kelsey White of the Utah Taxpayers Association, speaking generally about double-digit increases, “because often these cities haven’t raised taxes for a while. Some cities, who try to raise taxes almost every year, will do a small single-digit raise. But then do it every single year, which can actually be worse.”
In other words, while Wellington and Uintah are playing catch-up after delaying necessary conversations, cities like Ivins are having the hard conversations in the moment of need—and the debate has been far less contentious.
Billy Hesterman, president of Utah Taxpayers Association, puts it this way: “Our recommendation has been for entities to examine this every five to seven years.”
What he advises against are routine, inflation-only increases—what he calls “slow-boiling taxpayers to death by taking small amounts that add up to large hikes over time.”
Hesterman adds that tax increases should come only after governments show they’ve stretched existing dollars as far as possible.
“Yes, the state needs schools, roads, parks, water, public safety, and other essential services, but a strong exercise should be done before any tax increase to determine if the entities are funding things that are necessary or seeking after nice-to-have items at the expense of Utah’s taxpayers,” he notes.
And that’s exactly what’s happened in Ivins, according to Mayor Chris Hart, who has held public office for 15 years.
“Ivins is a remarkable little city, and it’s been a very, very well-run city for the entire time that I’ve at least been close enough to see,” he told Realtor.com® in late July.
After decisively employing temporary fixes—like using COVID-19 relief funds and having some city employees double up on responsibilities—he says it’s finally time to raise the tax rate.
The city’s proposed hike would add $860,000 to city coffers, enough to comfortably fill the budget gap and fund essentials like police vehicles, stormwater infrastructure, and park maintenance staff.
What the country can learn from Utah
As municipalities across the country grapple with their own budget shortfalls and mounting backlash over growing property tax burdens, the lessons from Utah are profound.
For one, putting off rate increases can keep homeowners happy in the short run, but it all but guarantees a painful reckoning later. By contrast, cities that revisit their tax rates regularly and earnestly try to stretch budgets for as long as possible may face criticism, but they avoid the fiscal cliffs that lead to 100% or 200% spikes.
In short, honesty and consistency matter. Taxpayers are more likely to accept increases when they can see how revenues are managed, when leaders show they’ve stretched every dollar, and when the hikes aren’t the product of years of procrastination.
And as Hesterman stresses, those choices start at the ballot box.
“Please vote in this year’s municipal elections,” he says. “Keeping taxes low starts with these elections. We need candidates who will make tough choices and serve as fiscal hawks in city halls statewide.”
Municipal elections might feel small, but the officials chosen there will decide how high taxes climb and how fairly the burden is shared.