The city's property tax rate is not really going up; it's actually staying the same, Farmington city officials told a handful of residents at a recent Truth in Taxation public hearing.
The council decided to raise the city's tax rate to equal last year's tax revenue on individual homes. That reverses its position from May when it adopted the current city budget.To do that, the city had to fight the state Truth in Taxation law, which defines setting property taxes at a rate equal to last year's as a tax increase, City Manager Max Forbush said.
The law doesn't allow cities to take advantage of growth, he explained to the dozen residents at Wednesday's public hearing. It only allows a city to generate property tax revenue equal to that of the year before.
If the city grows and its assessed valuation increases, individual tax rates are automatically decreased unless the city raises the tax rate.
Allowing the tax rate to decline would have cost the city $15,000 in this year's budget, money the city "can put to many uses," said Forbush.
The mandated rate decrease would have saved the owner of an average home in Farmington $2.69 a year, the city manager estimated.
Two people, both retirees living on fixed incomes, challenged the city's reversal of its position, saying the taxes on their homes are going up because of other taxing entities, like the school district and county government.
They are in danger of losing their homes because they can't keep up with the taxes, the two residents told the council.
Mayor Robert Arbuckle said the council can control only the property and franchise tax rates and there has been only one increase in the past five years. That hike was to pay for revenue bonds for the new city municipal building, Arbuckle said.
The city is one of the fastest-growing in the state, the mayor said, and needs to improve its roads, expand its police department and upgrade the its infrastructure to keep pace with the growth.
The point the two residents made was not lost on the city officials. Councilman Greg Bell remarked that the city needs to remember where its money comes from. As a new councilman, he said, he scrutinized the proposed budget carefully, looking for places to cut, but found it to be very stringent.
Councilman Hank Semadeni said the council needs to differentiate between wants and needs in its budgeting and pledged to look even more carefully at next year's spending requests.
Councilmembers Pat Achter and Marda Dillree defended the city's budget, calling it conservative and tight. The city has put off several projects, including park improvements, to save funds, they said.
According to figures supplied by the city, the owner of a home assessed at $74,000 - which Forbush said is an average value for a Farmington home - will pay $96.78 in city property tax this year, the same as in 1989. The automatic cut mandated by the state tax formula would have reduced that to $93.07.