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Big changes in property taxes aren't likely in '98

Some believed the 1998 Legislature could be a breakthrough session concerning property taxes.

All the markings were there:Something had to be done concerning the sticky "intangible" question raised in the state Constitution, spurred on by the WilTel decision in the Tax Commission.

Older residents are facing ever-increasing property taxes as values of Utah homes continue to rise.

And a number of local governments, freed from a law prohibiting property-tax increases without a vote of the people, raised the hated tax in 1997.

Property taxes clearly were on legislators' minds. A computer search by the Deseret News shows around 80 bills introduced this session contain the phrase "property tax" at least once. That's more than one-tenth of all the bills that will be considered this year.

Some are only minor changes. But 26 would make a real difference to certain property tax payers.

Yet as the 1998 Legislature rushes to a finish, little has been done on property taxes. Some of the most far-reaching legislation is already dead or on life support.

The broadest bill, sponsored by Sen. Robert Montgomery, R-North Ogden, has been killed in the Senate. Needing two-thirds vote to change the state Constitution to eliminate all references to property taxes (which, in turn, would free up the Legislature to give homeowners greater property-tax breaks), the resolution didn't even get a majority vote.

A bill by Sen. Steve Poulton, R-Holladay, which would reinstate for 1998 the vote of the people before a local government or school district could raise property taxes, hasn't even had a hearing yet in the Senate Revenue and Tax Committee.

Rep. Glenn Way, R-Spanish Fork, has a constitutional amendment prepared that would require voter approval before the Legislature or any local government could raise income, sales or property taxes. Way says he quietly asked that his bill be killed.

"Senior members of the House Revenue and Taxation Committee suggested I should wait," he said Wednesday.

Sen. Dave Buhler, R-Salt Lake, gave up on his bill that would give owners of cabins and second homes a 25 percent property-tax break. Even though he found great support among second-home owners - who packed a public hearing in favor of his measure - he couldn't find support for final passage from the Senate.

Two measures that would deal with the WilTel issue have yet to be debated. Thursday, the Tax Commission issued a new rule concerning intangible property of big businesses - the heart of the problem. Tax Commission Chairman Val Oveson said even with the new rule, lawmakers must act to avoid a tax shift from big businesses to homeowners and small businesses, although the rule, he said, "makes that shift less than it would have been" without the rule.

So what happened? How could such promise for property-tax relief disappear so quickly in the Legislature?

"We're not finished yet," says Rep. Ray Short, R-Holladay, of the current session.

But Short himself greatly cut back on the property-tax legislation he'd planned. He opened the session with 12 property-tax bills in his stable. But he ended up sponsoring only two - one a measure that would broaden the definitions and aid in the current Circuit Breaker law, which helps poorer Utahns stay in their homes, and another that would require all Truth in Taxation public hearings to be held after 6 p.m. at night so more residents can attend.

"Several other (legislators) wanted to carry some of the bills I was considering, so I let them. And I just dropped a few, as well," Short said.

Sen. Howard Stephenson, R-Draper, opposed Montgomery's constitutional change, fearing shift in property tax by the voter-hungry Legislature from homeowners to business. Yet Stephenson has his own property-tax amend-ment that faces considerable opposition.

"I don't know what will happen" to his own measure, Stephenson said. "But I'll push to get a (public) hearing," which his bill has yet to receive.

Stephenson wants a constitutional amendment that says after a person buys a new home, the property will never be reappraised for tax purposes "as long as he owns it."

Stephenson says accompanying legislation would allow the Legislature to impose a yearly tax increase of some small amount - like 2 percent - to at least give some small nod to real estate inflation.