Homeowners taxes up dramatically
A dramatic increase in home prices triggered an across-the-board increase in property tax values for homes in San Juan County.
Even though, in theory, the adjustments are supposed to have a corresponding decrease in tax rates, it appears as if homeowners in San Juan County will have a sizeable increase in their property tax bill.
How the adjustment will impact property taxes was discussed at the June 15 meeting of the San Juan County Commission, during which the tax rates were set. After setting the rate, Commissioners Kenneth Maryboy and Willie Grayeyes stated that would like to have a public hearing on the matter. Commissioner Bruce Adams was not at the meeting. No details about the hearing are available at the press deadline.
San Juan County John David Nielson recommended that Commissioners adopt the certified tax rate, which would result in a slightly lower tax rate.
However, for homeowners in San Juan County, the slight decrease in tax rates is more than offset by the significant increase in home values. The end result is a significant increase in property taxes for homeowners.
At the certified tax rate, the County portion of taxes on a $250,000 property valued at $250,000 in 2020 would increase from $488 in 2020 to $632 in Blanding, to $637 in Monticello, and to $665 in Spanish Valley.
And that is just for the San Juan County portion of property taxes. The increase could be similar if other countywide taxing entities, such as the school, health, and water districts, adopt a certified tax rate.
If these entities adopt a similar tax rate, the total increase for a property valued at $250,000 in 2020 would grow from $1,755 in 2020 to $2,055 in the county, to $2,276 in Blanding, to $2,293 in Monticello, and to $2,395 in Spanish Valley.
That is a one year increase of $300 for a home in the county, $520 for a home in Blanding, $538 for a home in Monticello, and $639 for a home in Spanish Valley.
The possible impact on municipal property taxes may be less since the properties have a lower centrally assessed tax base to start.
A recently released annual report on property values in San Juan County includes several significant changes, including “factoring” of home values and the continued decrease in industrial properties.
The most significant change is the factoring that was required by the Utah State Tax Commission. It was triggered because actual home prices have been significantly higher than the assessed value of the homes.
As a result, the assessed value of every home in the county is set to increase by at least 21 percent, with larger increases in some areas.
Assessed home values in the Blanding area, including homes outside of city limits, will increase by 34 percent, while the increase for homes in the Monticello area is 35 percent.
Assessed home values in the Spanish Valley area will increase by a whopping 41 percent.
As a result, the assessed value of a $250,000 home in the county would increase to $302,500, while the assessed value of a similar property would increase to $335,000 in the Blanding area, to $337,500 in the Monticello area, and to $352,500 in the Spanish Valley area.
The factoring led an $85 million increase over the past year in the total value of locally assessed properties, such as homes, in San Juan County. The change is from $454 million in 2020 to $539 million in 2021.
Utah State law requires that any change in property values caused by factoring should be accompanied by a corresponding adjustment in tax rates in to make overall collections revenue neutral.
However, the adjustment is negligible because of the ongoing drop in the value of centrally assessed industrial properties.
The second change that is evident in the 2021 property value report is a $31 million drop in the value of the centrally assessed properties. Generally, these are oil, gas, mining, pipelines, and other infrastructure properties.
The change is from $354 million in 2020 to $323 million in 2021.
The majority of the drop is in the assessed value of the Elk Petroleum properties in the Aneth Oil field. Elk successfully challenged a prior valuation by the State Tax Commission.
San Juan County Clerk John David Nielson reported to Commissioners that the trend “has shifted the majority of the tax burden onto real property owners in the county.
“The decrease in Centrally Assessed Property value is mostly due to a decrease in valuation of oil and gas. This valuation is affected by tax value appeals, drops in oil prices, increased cost of production, and other factors.”
The drop in centrally assessed properties continues a long trend in which the locally assessed properties, such as homes, carry a larger portion of the tax base.
With the most recent drop, the value of centrally assessed properties is just 34.3 percent of the total tax base.
In contrast, centrally assessed properties were 65.4 percent of the total tax base in the county ten years ago.
In the 1970s and 80s, centrally assessed properties were up to 85 percent of the total San Juan County tax base.
What is clear is that homes and other locally assessed properties will carry an increasing portion of the tax load in San Juan County.
Nielson’s report adds, “Continuing to shift the tax burden to the Real Property owners (representing about half of county citizens) is a dangerous trend.”