Overseers of the Central Utah Project want to raise property taxes in nine northern and central Utah counties.
The Central Utah Water Conservancy District last week unanimously approved levying the district's top rate of 0.0004 in Salt Lake, Utah, Summit, Wasatch, Sevier, Piute, Juab, Garfield and Sanpete counties.Under the new rate, owners of a $100,000 home in Salt Lake or Utah counties will pay about $3 to $7 more in property taxes this year. That will wipe out a property tax cut announced Monday by the Salt Lake County Commission, which nominates five members to the Central Utah water board.
If the board had elected to adopt the certified rates recommended by Salt Lake and Utah counties' auditors, those same homeowners would have seen an estimated 30- to 40-cent increase.
But the county auditor's recommendation would keep revenues consistent with economic growth, which is not exactly what the district wants.
The water district needs more money, now. Congress has required Utah contribute up to $325 million to complete the CUP, and the district is trying to scrape up $20 million of that in the next two years to cover environmental studies on components left to complete.
The $2 billion CUP is designed to take Utah's share of Colorado River water flowing from the Uinta Mountains and channel it through a system of reservoirs and pipelines to the Wasatch Front and central Utah. Several pieces of the project have already been built - such as Jordanelle Reservoir. But about $300 million in environmental and conservation projects and more than $600 million in other components are yet to be built.
Two years ago, desperate district officials approached the Legislature to raise their property tax limit to cover the local cost share. But Gov. Mike Leavitt, determined to snuff out any tax hike on his watch, stepped in and cut a deal to form a task force that would explore various financing schemes for the district.
According to task force recommendations, the district must stretch its own resources and borrow from the state's revolving water loan fund for short-term needs, such as the environmental studies. In the long term, bonding, water-user fees and increased property taxes could pay for building the projects that survive the environmental screening process, the task force said.
"We are following the task force's recommendation to pull the maximum from each county," district controller Stan Weaver said of the board's decision to impose the maximum tax rate. The higher levy will reap an additional $1 million annually, he said.
But Weaver said raising money was not the only reason for increasing the levy. Three counties in the district - Uintah, Duchesne and Millard - were already taxed at the highest rate. Millard County is leaving the district, but complaints of unfair treatment in the Uintah Basin initiated the across-the-board increase.
"This is an equalization move," said district spokesman Elden Laird.
Under state law, the board's resolution to raise the levy will be subject to a public hearing before Aug. 17. Hearing dates have not been set.
Despite general support that the CUP is critical to the Wasatch Front's future, it may meet some public opposition due to its timing. Soaring property values have saddled many homeowners with substantially higher tax bills, touching off a furor over the state's property tax system. Salt Lake County officials have responded with a rate cut and have vowed to roll back taxes in the county's posh Holladay area (see accompanying story). A legislative tax force has also been appointed to explore changes in the system.
Measure in pipeline
Utah's senators have put a bill in the pipeline that could allow the Central Utah Project to transport non-CUP water for other agencies.
Sens. Bob Bennett and Orrin Hatch, R-Utah, say that would allow Provo to use some CUP facilities to help with its water delivery. Bennett said CUP officials have "been studying ways to work with cities and counties to avoid duplication of water facilities, and to increase the more efficient use of water treatment and delivery systems."
He said the bill he introduced with Hatch "will ensure that local water systems are allowed to utilize these facilities (on a space-available basis) without being forced to construct their own."
Bennett said similar authority already has been given to projects in Nevada and California. He said he expects a hearing on the bill next week.