The calculation of property tax rates for residents in Santaquin involves a collaborative process between local and regional government entities. According to the city's frequently asked questions, the property tax rate is calculated by the State of Utah using information and data from both Utah County and Santaquin City.
One specific mechanism used in this process is the certified tax rate. According to the city's website, this is a revenue-neutral rate that changes when property valuations increase or decrease. This certified tax rate is then applied to all properties, including new residential and commercial developments. The city's own documentation notes that the Santaquin City certified tax rate itself decreased by 57% in the last ten years.
While Utah County provides data used in these calculations, the city's tax rate is also influenced by state law. Per Utah State Law, the city must decrease the property tax rate when property values increase so that the overall amount of money the city receives stays the same. This ensures revenue neutrality. However, the city's documentation notes that unless the city adjusts the property tax rate, the overall revenues it receives will stay the same while costs continue to rise due to inflation.
Growth has significantly impacted the local tax landscape. According to the city's FAQs, the number of homes in Santaquin City grew by an unprecedented 107% during the period ending in 2023. During that same time period, the property tax rate decreased by 57%. While the number of homes has more than doubled, property tax revenues from those homes have only increased by 66% over the past ten years. This discrepancy is due to how the property tax rate is calculated under state law.
Inflation has also played a role in municipal finances. The city's documentation states that inflation increased by 24.7% over a ten-year period, reducing the city's ability to pay for needed wages, goods, and services. To address financial needs, the city identified a need for $595,000 in additional annual revenues. According to the city's FAQs, the new rate was set at 0.001404. The city's documentation states that the increase was intended to generate approximately $595,000 in revenue each year.
The city's documentation specifies how these revenues would be used. The city intended to dedicate approximately $595,000 in revenues generated from this proposed property increase to fund two police vehicles and maintain the recent fair-market compensation increases for firefighters and police officers. For the average household, the cost was projected to be approximately $10 per month.
As of 2020-04-01, the population of Santaquin was 13,725 according to the town knowledge base.
What this means for Santaquin
For Santaquin residents, the interplay between Utah County data and state law means that property tax rates must adjust to maintain revenue neutrality. Even as home values and population grow, the tax rate may decrease to keep city revenues stable, requiring the city to seek new revenue streams to cover rising costs from inflation and service needs.
