Murray proposes 15% property tax increaseMay 30, 2022 04:45PM ● By Shaun Delliskave
Murray public safety salaries are one reason the city wants to increase property taxes by 15%. (Photo courtesy Murray City)
By Shaun Delliskave | [email protected]
Blame it on inflation and the competition to hire and retain public safety employee, but Murray resident’s property taxes are going up. Mayor Brett Hales initially proposed raising Murray’s portion of resident’s property taxes bill by 20%; Murray City Council whittled that down to 15%. For property owners, this equates to a property tax increase of approximately $54 on a $400,000 home.
Besides Murray City, a Murray resident’s overall property tax is sliced up between Salt Lake County, Murray or Granite School Districts, Murray City Library, and mosquito abatement districts. School districts generally receive 60% of every tax dollar collected, while Salt Lake County typically collects 20%.
Murray’s last tax hike happened in 2019 when the city raised its property tax rate by 45%. The city will approve a tentative budget to start the fiscal year in July, but Utah State law requires a Truth-in-Taxation public hearing in August to finalize any tax increase.
“The main reason for the increase is to offset the effects inflation has had on city expenses since the last property tax increase in FY2019. The cost to provide city services have increased in personnel, operations, and debt service. The growth in property tax collections has averaged only $109,000 or 1% of property tax collected. Inflation has been higher than that, especially the inflation experienced to remain competitive with police and fire department salaries,” Murray City Chief Cdommunications Officer Tammy Kikuchi said.
Almost 50% of all Murray property taxes go to public safety. Police and fire salaries alone have risen by $3 million since FY 2020. Their combined salaries exceed all other general fund categories by function combined including all other city employees salaries and bond debt.
“To remain competitive and keep our officers, in September 2021, the city council approved an approximately 15% wage increase for police officers costing around $500,000. The three years of property tax growth did not even cover this increase,” Kikuchi said.
Mayor Hales wanted to give city employees a 7.5% cost of living adjustment (COLA). The council countered to give a 5.5% increase, but a last minute amendment and a close vote of three versus two, the council stuck with the mayor’s 7.5% COLA.
“The consumer price index at the time the mayor’s budget was being drafted was at 8.1%, and it has since risen. Other cities have proposed between 5% and 13% COLA. With unemployment being at 2%, the city cannot afford to lose our skilled workers to other cities,” Kikuchi said.
The city has looked at cutting city budgets that have not quite recovered from budget cuts made during the pandemic. The City Council’s Budget and Finance Meeting on May 11 created an uproar as one of the proposed items of discussion included freezing the progress of the Murray Theatre renovation.
“The mayor asked city departments to carefully review their budgets and cut items that were not required to keep service levels at or below what citizens expect. Even with rising costs, the City’s General Fund budget for operations has remained relatively flat over the last few years,” Kikuchi said.
Could Murray City sell off real estate to help pay for the increased costs while inflation is high? According to the city, the answer is no. The property where the current City Hall sits and the properties in the downtown area are owned by the Redevelopment Agency, a legal entity separate from the city. Therefore, there is no legal way to sell those properties and put the money received into the General Fund to offset the property tax increase.
Inflation is not the only culprit behind the tax increase but also the drought.
“The budget for purchased (electrical) power increased $2.8 million due to the ongoing drought,” Kikuchi said. “The unrestricted fund balance of the (Murray City) Power department is decreasing due to capital and maintenance projects, along with an increase in the cost of purchased power. They are rebuilding the central substation, purchasing a transformer, starting a project to change the meters to an AMI (a two-way communication system to collect detailed metering information) reading system, and repairing the penstock and generators at the hydro plant; at the mouth of Little Cottonwood Canyon.”
Paying down the bond on the City Hall also figures significantly in the city’s budget. The city will be paying $1,896,250 in bond interest and principal.
According to Murray City Budget Director Brenda Moore, out of 17 Salt Lake County cities, Murray’s 2022 tax rate would rank it as the 12th highest, but with the 15% increase, and if no other county city raises their rates, Murray would rank ninth.
Several large city capital projects sat on the chopping block. The council considered cutting funding to the renovation of the Murray Theatre but decided to move forward with that. Other notable projects include renovating the old National Guard armory by Murray Park into a meeting venue and creating a new park storage facility which the former outdoor ice rink currently function as.
The tentative budget can be found online at www.murray.utah.gov.