Murray City leaders are weighing a proposed property tax increase as part of the mayor’s tentative 2027 fiscal year budget, a plan shaped by rising personnel costs, slowing revenue growth and mounting infrastructure needs.

At the center of the proposal is a 9.8% increase in the city’s property tax rate, expected to generate approximately $1.22 million in additional revenue. According to the budget document, the increase would raise Murray City’s property tax rate from .001403 to .001541 and result in an estimated annual increase of $45.60 for a primary residence valued at $602,900.

City officials frame the proposal as necessary to maintain service levels in the face of growing financial pressures.

“To balance the mayor’s budget there is a request for additional property tax revenue of $1,224,135 or 9.802%,” the document states.

State and federal policies place Murray in a tightening financial vise—absorbing unfunded state mandates, losing ground on federal and state support, and operating under tax laws that restrict revenue growth—leaving local officials little choice but to shift more of the burden onto city taxpayers to sustain basic services.

For example, a new state mandate tied to mobile device forensic investigations requires additional police resources, yet “the state did not allocate any funds to accomplish this requirement,” forcing the city to absorb the cost locally. At the same time, federal and state grant funding—captured under intergovernmental revenue—is declining, with that category projected to drop by 16%, reducing outside support for city programs.

Compounding these pressures, Utah’s property tax system limits automatic revenue growth, meaning cities must formally raise rates through a public process to keep pace with rising costs. Together, these factors create a financial environment where Murray must navigate external mandates and shrinking outside funding while relying more heavily on local taxpayers to maintain services.

The budget outlines clear consequences if the increase is not approved, particularly for public safety.

“A new officer will not be hired…. Overtime will be decreased and there will be less officers available,” the document notes in describing the impact of no tax increase.

Police and fire services together account for nearly half of the city’s General Fund expenditures, underscoring their central role in the budget. The proposal includes funding for a new police officer to meet a state requirement tied to digital forensics investigations.

“Senate Bill 19 requires that mobile device forensic services be performed in an expedited manner. The state did not allocate any funds to accomplish this requirement,” the budget explains.

That dynamic—state requirements without corresponding funding—adds pressure to local budgets, forcing cities like Murray to either reallocate existing resources or seek additional revenue.

Beyond public safety, the budget is heavily influenced by personnel costs, which make up the majority of city spending.

“Personnel costs comprise 69% of the General Fund budget,” the document states.

Those costs continue to rise due to a combination of factors, including a 2% cost-of-living adjustment, merit-based step increases and higher benefit expenses. Among the most significant increases is health insurance.

“The cost of medical insurance increased this year by 14.7% with no change to the plan,” the budget notes.

While expenses are climbing, revenue growth is more constrained. Sales tax—Murray’s largest revenue source—shows little expansion.

“While the FY2027 budget shows a sales tax increase, the FY2027 budget has no increase from the projected FY2026 actual sales tax collected,” the document states, citing fluctuating economic indicators and the possibility of a recession.

At the same time, some revenue sources are declining. Intergovernmental funding, which includes state and federal grants, is projected to drop significantly.

“Intergovernmental [revenue]… $740,000… -16%,” the General Fund revenue table shows.

Together, those trends—flat sales tax growth and reduced outside funding—limit the city’s ability to absorb rising costs without adjusting taxes or cutting services.

Another major component of the budget involves utility systems, particularly water. Residents have already seen rate increases, with more built into the coming year.

“The new rate schedule had a 17% rate increase which occurred April 1, 2025, which will be followed by another 17% increase April 1, 2026,” the budget states.

City officials attribute those increases to long-term infrastructure needs rather than short-term fluctuations.

“The Water Fund has $11.7 million of necessary projects in the four years following this budget and is starting to save for them,” the document explains.

Unlike some municipalities, Murray does not purchase its water supply, meaning fixed system costs remain regardless of usage levels.

The city is also relying on transfers from enterprise funds—such as water, wastewater and power—to support general operations.

“Murray City Corporation intends to transfer funds from the city’s Water, Wastewater and Power enterprise funds to the city’s General Fund to supplement city services,” the document states.

Those transfers total several million dollars and represent a significant piece of the city’s financial structure.

In addition to operational costs, the budget includes a slate of capital improvement projects aimed at maintaining infrastructure and enhancing public amenities. Among the larger investments are:

·       $3.1 million for Park Center roof and air handler replacements

·       $4.3 million for street improvements and traffic upgrades

·       $845,000 for police vehicles and equipment

·       $630,950 for fire equipment

·       $600,000 for a new “Ninja Course” recreational feature in Murray Park

These projects reflect both ongoing maintenance needs and efforts to improve quality of life for residents.

The budget also highlights a longer-term financial challenge: the eventual loss of a local option sales tax that currently helps fund city operations.

“The city will be losing the .2 city option sales tax in October of 2030, and at that point major budget adjustments will need to be made,” the document states.

That looming change adds urgency to current financial planning, as the city works to balance immediate needs with future stability.

Overall, the proposed FY2027 budget reflects a balancing act between maintaining services, addressing infrastructure demands and managing taxpayer impact. While revenues are projected to increase modestly, the combination of rising costs and uncertain economic conditions leaves limited flexibility.

The Murray City Council will review the proposed budget in the coming weeks with a public hearing scheduled before final adoption. Residents will have an opportunity to weigh in on the proposed tax increase and broader spending priorities.

As city leaders consider the proposal, the central question remains whether the additional revenue is necessary to sustain current service levels—or whether adjustments can be made without increasing the tax burden on residents.