Multiple factors contribute to the amount of property tax a homeowner pays, including the Minimum Basic Tax Rate. The Minimum Basic Tax Rate is the amount of property tax charged statewide to pay for the Minimum School Program (refresh your public education budget knowledge here). While the Basic Rate (and recent increases) factors into property tax obligation, other elements also play a role, including:
- a legislative policy change related to property tax notices;
- dramatic increases in the taxable value of residential property across the state;
- the relative value of one property type compared to others (residential vs business or industry); and,
- the Basic Rate is a statewide property tax for public education, so it considers the value of property across the state and shifts the tax obligation among school districts based on the value of property in each.
During the 2018 General Session, the Legislature passed “House Bill 293, “Tax Rebalancing Revisions” which implemented a 5-year “freeze” to the Basic Rate, holding it at 0.0016 per dollar of taxable value. In normal circumstances, a property tax rate will decrease over time as the taxable value of property in an area increases. Holding the rate generates additional revenue off the increasing value. Through state formulas for public education, this allowed for increased property tax revenue to contribute to paying for certain legislative initiatives. A summary presentation on “Tax Rebalancing for Utah Education” explains this in more detail.
While the freeze to the Basic Rate was largely blamed for the increased property tax bills experienced by Utah homeowners in 2022, the freeze represents only a small factor in the overall story. For a detailed look at the relationship between property taxes and public education funding, check out this brief prepared by the Office of the Legislative Fiscal Analyst: Property Tax and the Basic Rate.