A Truth in Taxation hearing was held Aug. 15 at Holladay City Hall to allow taxpayers public comment time to address the Holladay City Council regarding a proposed 15.05% property tax increase. 

The council adopted the 2024-25 budget on June 13, which covers the fiscal year beginning July 1, 2024, and ending June 30, 2025. The final budget anticipated a 15.05% property tax increase, raising approximately $1.2 million in needed revenue for Holladay City.

The property tax rate increase on an average home in Holladay valued at $944,000 would be an additional $97 yearly. Residents might assume the increase is to their total property tax bill; however, this is inaccurate. The 15.05% increase is only to the Holladay City portion of the property tax, approximately 12% of a resident’s total property tax bill. When property taxes are raised 15.05%, the impact of the overall property tax increase for a property owner is somewhere around 2%. For individual taxpayer clarification, Holladay property owners can refer to Holladay City’s line item, which is included in the overall property tax bill.

This will be the second time property tax has been raised since the city incorporated on Nov. 30, 1999. In 2021, a property tax increase of about $7 million was invested over three years to stabilize a failing road situation. So why is the city of Holladay raising property taxes again?

According to Mayor Rob Dahle, there are three main reasons for proposing a property tax increase: basic inflationary pressures, a significant increase in the police line item, and the need to continue investing in Holladay City roads.

When the city of Holladay went through a tax increase in 2021, the Utah Taxpayers Association, a nonprofit 501(c)(4) organization that works to limit state and local taxes, endorsed that increase and also provided the input that Holladay City should actually be assessed for additional needed revenue every four or five years to capture inflationary increase and not to let a needed increase go for 20 years and then have to begin to address a significant property tax increase.

“Part of the reason we’re doing this is the inflationary pressure we’ve seen over the last three or four years,” Dahle said. “The largest issue we’ve had to tackle, particularly this year, is pressure in public safety and police. After the events that took place in 2020, it created a wage war within the police community, which caused our police wages to rise, which required we absorb. This year, we’re in a unique situation where the state legislature basically forced the separation of the County and County Sheriff from the Unified Police model, which is the shared model that Holladay participates in. The forced separation caused a loss of economies in our costing model, which all members had to absorb. An increase in our police line item this year was about $750,000, which was a huge impact. We think it was a single impact and hope it will stabilize an inflationary increase over time. Right off the top, 53% of our city budget goes to police and fire. But the unique situation we had to address this year with the forced separation has had a dramatic impact on the budget challenges this council had to address. This is what caused us to have to go back and ask for a property tax increase from our residents.” 

 An additional unique situation the city of Holladay has had to address is statewide residential tax rates have risen at a much faster rate than commercial rates. Residential tax rates have had to increase to keep the revenue steady.

“This is my first term serving as a city councilmember,” Councilmember Ty Brewer said. “Government, to me, has been eye-opening at the city level. I will say that personally and ideologically, I like to see the government's role as small as possible and to take good care of how public funds are spent. Not having had a political background, I have to say, I’ve been surprised at how leanly Holladay runs and the care and concern I have seen from all of the councilmembers. It’s been one of the more rewarding things I’ve learned as I’ve come to serve in the office. I see the wisdom in what the Taxpayers Association recommended, so we don’t have these sudden tax jumps. As a council, we’ve tried to be responsible and good stewards of the public trust.”

  Public comment time was opened during the council meeting to allow residents to direct their concerns, questions and comments about the proposed property tax increase to the council.

“I would ask as a citizen of Holladay that you look at the budget as a good steward, and how we in every household have to cut back in certain areas,” Holladay resident Don Reese said.  “I’m going to ask that you be very scrutinizing in terms of how you pass these increases on. I have five kids who have kids of their own, and they are wondering where they’re going to get their next gallon of milk. Every dollar that you can save is appreciated by the people. We have to defer things, so maybe the city of Holladay needs to defer things. Have you considered looking at other departments and their budgets to make the budgets neutral to facilitate these increases like households have to do?”

Councilmember Paul Fotheringham assured those in attendance during the budget process the council shares similar values and principles to those expressed by Holladay residents. 

“We are a lean municipality relative to other organizations in the county,” Fotheringham said. “Three years ago, I went back through all my property tax bills to the year Holladay incorporated. I saw even though the value of my home had increased dramatically, other line items on my property tax notification had fluctuated, but Holladay had not in almost 20 years. My property tax for Holladay was the same, a few dollars up and down over 20 years. The only time it went up was the year we did a major remodel. But otherwise, Holladay's line item remained the same. If you were to look at your property tax notice overall, you would see the other line items have gone up over time, and it’s because Granite School District and Salt Lake County, which are going to be the two major property line items on your property tax, every two or three years go through a Truth in Taxation hearing primarily to address increasing wages and benefits.”

The council first considered the tentative budget at its May 2 meeting. They then reviewed the budget over the next few weeks and held a public hearing on June 6. On June 13, the council adopted the 2024-25 budget.

“The suggestions made tonight would be very helpful when we go through the budget process,” Councilmember Drew Quinn said. “It’s during this time we decide what to spend money on. If you are concerned about your taxes and how the city is spending its money, I would encourage you to come to the city council meetings next May when we’re putting together the budget and have those critical discussions of where to spend the money.”

At the conclusion of the Truth in Taxation hearing on Aug. 15, the council voted unanimously to adopt the 15.05% property tax increase.

City Manager Gina Chamness extended an invitation to Holladay taxpayers who have further concerns or questions about their tax notices to make an appointment with her. She can be reached by email at [email protected]. λ