When Sandy Meadows and her husband built a home on Walker Lane, there were no premonitions that 30 years later it would be dwarfed by mansions next door in one of Salt Lake County's most prestigious neighborhoods.
Her husband was attached to the land through heritage, not financial prospecting. His grandfather homesteaded much of the area. He grew up there and he wanted to rear his own family in the rural setting of dense woods, streams and open fields.When the new money wanted the same things and started moving in, the couple saw their one-acre property and relatively modest home shoot up in value. But they didn't complain. They loved their neighbors. And higher home prices certainly could only help them, they thought.
Then last October, while nursing a spouse who was dying of cancer, Sandy Meadows received a tax notice showing that their property taxes had more than doubled from $2,400 to $5,000.
Later that month her husband died, leaving her a small pension she must now set aside to cover her tax bill. She lives off a modest travel agent's salary, a job she initially took to cover medical expenses during her husband's long illness.
But the 57-year-old widow doesn't believe she can keep up the paycheck-to-paycheck lifestyle for too long. "It will drain me financially," she said. The county assessor's office advised her to either take out a loan or sell the house.
If Meadows does sell, the net profit should provide for a comfortable future. The county assessor said the house her husband built for $22,000 is now worth $440,000. But the money doesn't motivate Meadows to pack up and leave.
"When you lose a spouse, you just can't uproot yourself. I don't want to leave because it is home," she said. "My husband was born and died here. Our children grew up here. I love the ward and my neighbors. It's just nice."
The move would also displace Meadows' 81-year-old mother, who lives in a small cottage on their land where "she can be independent and she is so comfortable."
Similar stories can be heard throughout the affluent Holladay-Cottonwood area of Salt Lake County. Longtime residents are caught in the frustrating dilemma of considering moving because their property is too valuable.
They question a tax system that assumes those living on high-priced property have incomes to match. They complain the system punishes anyone who improves his or her home. And they stress it was the booming real estate market, not their property improvements, that inflated the home values.
Their complaints have been heard, and the Legislature formed a task force to take a shot at resolving the problem. On Wednesday, the 13-member Property Tax Task Force will meet for the first time.
Exactly what solutions the panel will consider over the next few months won't be known until after Wednesday's initial meeting. But co-chairman and Senate President Lane Beattie, R-Bountiful, said he hopes to have some proposed legislation before the next Legislature in January.
He also wants the solution to focus on the property-tax process rather than the tax itself.
"The bottom line is, no one is saying they shouldn't be taxed. But how it was done, that's the issue," he said. "A lot of people are talking about doing away with property taxes, but that's not even on the agenda."
Salt Lake County's system of analyzing and updating one-fifth of the county's property each year is flawed and unfair, Beattie said, because it places too large a burden on the unfortunate fifth being assessed.
He suggested revising the system so that a countywide adjustment is made each year. That would avoid huge increases in a given year and would spread the pain valleywide when the real estate market is hot.
But the process is just part of the problem, said Rep. Ray Short, R-Holladay. His failed attempts to reform the system with six different bills in the 1994 Legislature prompted the call for a task force.
"I feel the property tax is the most unfair tax levied against people," Short said. "Property taxes are getting to the point of taking away one of the basic rights of society, the right to own property. You can pay off your home, but you don't ever really own it if someone is slapping a property tax on it every year."
He said the task force should look at better ways to finance schools and local government services.
There may not be a logical link between a property's value and the taxes levied against it for education, mosquito abatement and other services. But it is a dependable source of revenue that isn't affected by economic ups and downs such as sales taxes, said Gary Cornia, a former state tax commissioner and an economics professor at Brigham Young University.
"The other advantage is that it provides local autonomy," he said. "Once you give up local sources of revenue, then those providing the funding (the state) dictate the services, too."
Those arguments apparently didn't deter Michigan this year from abandoning its property tax as its primary source for funding education. Michigan switched to sales tax. Other alternative mentioned over the years have been head taxes for education or fees in lieu of taxes for local services. California capped property-tax increases.
But any alternative will meet stiff opposition, primarily from educators and local government officials. So, the easier route to reform would be Beattie's idea of examining the process.
Salt Lake County Assessor Bob Yates takes exception to criticism of the county's system. Despite its obvious flaws, he said, it is recognized nationally as superior in accurately reconciling appraised value with the market value.
He said the issue of one sector of the county getting hit hard every five years comes down to two issues: state law requires a county to assess property every five years, and he doesn't have the resources to assess the entire county every fifth year.
Yates has a solution. He said the Legislature needs to pass a real-estate transfer act, creating a data bank of sales transactions that his office could tap into. He explained that the only way to accurately appraise property valleywide annually is to have quick, up-to-date sales information.
"Unlike our neighbors, we don't have access to that. We are like an island in the western United States," Yates said. "We have been after the Legislature for five years to pass the act and they won't do it because many think it is private information."
But property owners should beware of a countywide reappraisal system, Yates warns. If it had been done last year, most Salt Lake County homeowners would have seen their tax-assessed values soar. "Maybe the Rose Park and West Valley areas would have been stagnant," he said.
But whether taxes would have gone up depends on whether school districts, local governments, the Central Utah Project and other entities levying a tax against property would have kept their rates stagnant or raised them, Yates said.
"What needs to be done by this task force is to reduce taxation, not property values," he said. "Value isn't the problem. It's the tax assessed against" that value.