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How "Truth in Taxation" can improve accountability

  1. Utah was the first state to adopt "Truth in Taxation" in 1985.                                         

  2. Utah's law requires a "tax increase checklist" for taxing districts.                                           

  3. Certain tax increase requirements must also be met before taxes can be enacted.                                            

  4. Truth in Taxation also exists in Iowa, Kansas, Nebraska and Tennessee.                                           

  5. With the cry for property tax reform getting louder, policymakers in should focus their efforts on transparency and voter engagement with Truth in Taxation.

BY CHRIS CARGILL

Red Calculator

INTRODUCTION

Property taxes are an important part of the tax base for school districts, local governments, and many states. Though based on a relatively straightforward calculation, they are among the least understood taxes by taxpayers. Although there are variations in each state, the general formula for property taxes is the value of the property multiplied by the tax rate.

Too often taxpayers focus on assessed values instead of the spending decisions made by government officials when considering their property tax burden. With record property tax assessment increases occurring in states like Idaho, Montana, Washington, and Wyoming, homeowners are concerned about the potential impact on their property tax bills.

The main driver of property taxes is spending increases approved by policymakers and voters themselves through levies. The assessor is not responsible for any property tax increase, the budget writers are.

This is why efforts to restrict property assessments are often misplaced and lead to other problems. The better way to control property tax increases is on the spending side and/or with levy restrictions. One way to help bring greater transparency to the fact spending is the main cause of property tax increases is with a reform called Truth in Taxation.

READ IN-DEPTH STUDY HERE >>

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