A group against a state law that mandates higher taxes on second homes says it will take its fight to court after failing to get the Legislature to see things its way.
Led by homeowners who spend only part of the year in this resort community, the Second Homeowners Tax Coalition contends it's unfair they pay more property tax than permanent residents.Critics who have labeled the movement a rich man's cause are overlooking the fact that many second homes in Utah are cabins or modest recreational dwellings owned by middle-class people, said A. Richard Barros, a Dover, Del., an attorney who resides part of the time in Park City and founded the coalition.
The organization has raised $70,000 to wage its legal battle and says it will file lawsuits in as many as four counties.
"There's lots of precedent against unequal application of the law," said Barros. "It's simply unfair to charge second homeowners a higher rate because we then have to primarily support the schools and utilities."
But City Manager Toby Ross says owners of second homes get their share of services.
"They don't use police protection year-round? The road department isn't out there year-round taking care of their street? Water doesn't have to be provided year-round whether or nor they're home?" asked Ross, who said classrooms all over Utah rely on taxes from people who don't have children in public schools.
"That's true of retired people, young couples who don't have kids. The fact is, we've chosen property tax as the primary way to pay for schools."
Ross said 60 percent of local property-tax revenues come from second homes.
Though he couldn't put a precise dollar value on how the reduction might affect local government coffers, he said, "You can't not have an impact if 60 percent of the tax base suddenly is reduced by 30 percent."
The coalition ultimately would like to see owners of second homes get the same, one-time homesteader property-tax exemption as "primary residents," those who pay taxes on 65 percent of a home's value. "Secondary residents," those who spend part of the year in a second home in Utah, pay on 95 percent of the value.
City Hall administrators from Park City testified against a bill the group lobbied for during the legislative session that ended last week, arguing that extending the primary-resident exemption on property taxes to owners of second homes would gut an important source of public revenue.
Barros said opposition to higher taxes on second homes comes from several parts of the state, including elsewhere in Summit County, the St. George area (Washington County), around Bear Lake (Rich County) and in Salt Lake County. He said his group by the end of the month will file lawsuits in each of those counties.
If successful, the challenge could cost Summit County school districts and local governments $1 million annually, a loss that would probably be offset by raising property taxes on those with only one home, said County Auditor Blake Frazier.
Frazier also said any change would trigger an outcry from commercial property owners, who might also demand a property-tax break.