Some may wonder if their property taxes just go to their local city and nowhere else. The answer is no. In Herriman, the general City tax itself represents only a small portion—about 1.7% this year—of the total amount paid. Law enforcement and fire service taxes each add an additional 11.2%. So, all three City-controlled entities add up to 24.1% of the total property tax paid. So where does the rest of it go?
Several different entities have the authority to levy property taxes. For Herriman, this includes the Jordan School District, Salt Lake County, Herriman City and its related entities (law enforcement and fire), the Jordan Valley and Central Utah Water Conservancy Districts, and the South Valley Sewer District.
To the right is a graphic that shows what entities charge property taxes, who controls the entities, what the funds pay for, and a sample annual payment. Click on it for a larger view.
The state of Utah is somewhat unique in how it sets property tax rates. In many states, property taxes are a simple percentage, and the amount paid every year is directly tied to how much properties are worth—if property values go up, then taxes paid go up. In Utah, however, taxes are designed to stay the same year to year, regardless if property values go up or down. How does it work?
Taxing authorities submit a property tax revenue target to the State of Utah. County Assessors determine individual property values. The State uses the revenue target and the general trend of property values (information provided by counties) to calculate the appropriate rate to charge in taxes to achieve the target revenue during the year. This State-calculated rate is called the certified rate. Since property values change each year (usually increasing), tax rates are re-calculated every year. In a normal year, as long as a taxing authority doesn’t change their target revenue, the certified rate will stay the same or decrease from the previous year to offset rising property values. However, if a taxing authority wants to increase their target revenue, it will likely cause the State’s calculated certified rate to be higher than the previous year. If the rate is higher, then official notices must be mailed to residents and the taxing authority must hold a public Truth-in-Taxation hearing.
Once the final rate has been approved, property taxes will be paid during the following calendar year. For efficiency, taxes are paid to one central entity, the county. The county then disburses the tax revenue to the various taxing authorities throughout the year based on their rates. Those taxing entities and their governing boards may then expend the money based on their approved budgets.
The City Council controls Herriman City property taxes, the Herriman City Safety Enforcement Area (HCSEA), and the new Herriman City Fire Service Area (HCFSA). HCSEA taxes go strictly to public safety (law enforcement) funding and cannot go to any other use. HCFSA taxes fund fire and emergency medical services in Herriman and likewise cannot be used for any other purpose.
Residents will see a notice for an increase from 0% to 100% this coming year for the HCFSA; however, that simply shows a change of which entity collects fire service taxes. You may remember a notice in 2021 when fire service taxes were temporarily absorbed into the general City tax. This year’s change is the last stage of the transition from the Unified Fire Service Area (UFSA) to the HCFSA.
Despite this being the first year of the HCFSA’s existence, someone reading the mailed notice might infer that taxes have been paid before to the HCFSA. This isn’t the case, as fire service taxes were previously paid to the general Herriman City tax (for one year: 2021-2022).
The HCFSA’s target budgeted property tax revenue for the upcoming year is $7,500,000. This is the same amount that has been budgeted in previous years with the Unified Fire Service Area and temporarily with the general City tax. However, due to a difference in how the State Tax Commission interprets* a portion of State Code, the State’s certified rate** for the HCFSA was only about half of what is needed to reach that amount, and half of what has typically been paid by Herriman residents in previous years. Fire services cannot be paid for with half of the needed funds, so the HCFSA is proposing to meet the full amount that has been budgeted. Thus, in the State’s view, the HCFSA is proposing an increase because it is proposing to go over the State-generated certified rate.
* State law §59-2-924.2(6)(e) requires the certified rate to be one-half of the budgeted target revenue if the fire district is being annexed. The City is not annexing the fire district, but is beginning a new one, replacing a previous one with another.
** For information about certified rates, see section “How are Property Tax Rates Set in Utah?” above