Payson May See Property Tax Increase

As primary rate goes up, secondary rate could decline as bonds are paid off

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The Payson Town Council on Thursday will consider a 14-percent increase in the town’s maximum primary property tax rate — but there’s less to the possible increase than meets the eye.

In fact, even if the council opts to raise the town’s primary property tax rate to the state-set maximum, the retirement of several bonds will still lower the amount the average homeowner pays to the town next year, said Payson Mayor Kenny Evans.

The town’s finance staff has recommended that the town council raise the primary property tax by $.0345 to reach the upper limit — which will raise an extra $74,000.

That would boost revenue from property taxes to about $606,000 in the upcoming fiscal year — a fraction of what the town gets from sales taxes.

Even with that boost, the average homeowner will likely see his property tax bill from the town decline, as Payson pays off various voter-approved bonds that are covered by the secondary property tax rate.

The secondary tax rate will still have to raise $145,000 to pay off the bonds issued to pay for the construction of Green Valley Park. But due to an anticipated rise in the town’s total assessed value to $246 million, the secondary rate can fall and still raise enough money.

The town council could still reject an increase in the primary rate. Alternatively, the council could accept the maximum rate this week, but then opt for a lower rate in July when it has to take final action to set the property tax rate, said Evans.

“I’m not sure what all the pluses and minuses are,” said Evans. “But even if we go with the maximum rate, it’s still a reduction in the amount of property tax that will be paid.”

The council will set the maximum mum tax rate during a special budget session on Thursday in the town hall, starting at 4 p.m.

The council will also adopt its budget for the fiscal year that starts in July. The budget adopted on Thursday represents a spending limit for the upcoming year. The town can spend less, but not more. As a result, that preliminary budget is often inflated by lots of projects and grants the town hopes to get, but does not.

The tentative budget totals a staggering $75.6 million — or about $4,500 for every resident of the town.

However, that includes about $39 million in hoped-for state and federal grants.

The proposed budget includes about $19 million in projected revenue, with sales taxes representing the single biggest source of income for the town. The budget also includes about $15 million in reserves carried forward, much of it in the water department.

The new budget would provide the money to re-open town hall on Fridays and end the two-day-a-month furloughs that have effectively cut town workers’ salaries by 12 to 16 percent. Town hall has shut down on Fridays for the past year. That move saved money on utilities but not on salaries, since employees worked four 10-hour days during the Friday shutdowns.

The budget calls for a very small decrease in spending from this year, if you don’t count grants and bond-based special projects like the start of construction of the Blue Ridge Pipeline. The town hopes to get final approvals from the U.S. Forest Service on the route of the pipeline in December, which means construction could ramp up next year.

The preliminary budget calls for a 12-percent decrease in general fund spending to about $11.8 million. The general fund covers the operations of all the town’s departments, with the exception of the water department — which has its own fund. Other special funds pay for operations at the airport and various public construction projects.

The water department’s proposed budget would rise from this year’s $6.6 million to about $20 million, including $12 million earmarked for the Blue Ridge pipeline. But even spending on the core water department budget would rise from $4.8 million to $8 million, driven by a 10-percent jump in water rates and projects designed to replace aging, undersized water mains in older areas of town.

After the water department, the police department has the next biggest budget — $4.3 million — a roughly 3-percent increase from this year’s actual spending, but still less than the budget adopted last June.

The next biggest budget belongs to the fire department — $2.6 million — about $100,000 less than the actual spending for the current fiscal year.

None of the other departments spend more than $700,000, with the exception of Central Services — which covers insurance and employee benefits for all the departments.

Comments

Dan Varnes 4 years, 6 months ago

Why can't these local politicians realize that there IS no "economic recovery?" There won't be one, either.

"The recession is over!" HA! Such destructive propaganda, only given creedence by fools.

In bad times, you CUT taxes if you want financial health. Raising taxes is completely counterproductive, just wait and see!

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Jimi Alexander 4 years, 6 months ago

Yeah, Dan! That worked great for Herbert Hoover!

Oh, wait...

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