Moab has a property tax rate above zero for the first time in 32 years following a sometimes heated Truth in Taxation hearing Tuesday inside city council chambers.
Roughly 30 people spoke and the vast majority of them opposed the city’s longtime plan to reinstitute a property tax for a variety of reasons. Seniors on fixed incomes are already struggling to pay property taxes to Grand County, which has dramatically increased in some cases by over 600%.
Business owners are struggling to make ends meet as tourism is down compared to 2021, when the pandemic had Americans seeking the great outdoors in record numbers.
The tax rate approved Aug. 6 is .0002, which will produce $3 million annually. The owner of a $500,000 home would receive a tax bill of about $600.
How did we get here?
In 1992, Moab was at an economic crossroads. Mining had all but dried up and the tourism industry that would replace it was in its infancy. The council in place at the time set the property tax rate at zero in an effort to help residents, and there it remained for over three decades.
In 2021, a previous iteration of the Moab City Council also sought to reinstitute a city property tax and for months it looked like that was going to happen. Scandals in city administration and severe conflicts among city councilors fractured what had been a solid wall of support on the council.
When the city held its Truth in Taxation hearing in late August 2021, councilors wilted under the onslaught of opposition from residents and the measure failed 4-1 with former Councilor Kalen Jones as the lone proponent.
Mayor Joette Langianese won the election, along with councilors Jason Taylor and Luke Wojciechowski and it wasn’t long before another attempt to reinstitute the tax was underway.
The need
In a briefing provided to attendees at the Aug. 6 hearing, it was explained the bulk of Moab’s revenue stream comes from sales and use taxes to pay for general government functions including capital projects. “Due to a lack of consistent predictable funding most of the city’s assets have not received the level of attention required, including maintenance and upgrades,” the briefing reads.
A city property tax, reads the briefing, is the most “stable and consistent source of funds for a city to pay for general government functions.” Harkening back to the pandemic, the briefing notes all but the most essential services, such as water, sewer and garbage, had to be shut down, leading to staff layoffs.
Indeed, it was the pandemic that exposed the city’s vulnerability as there was no alternative revenue stream available.
It’s important to note that Moab is the only city in Utah that didn’t have a property tax. Both state and federal officials “have expressed concerns” whenever the city has asked for grants, loans and federal or state funding support “why city residents are paying their share of the costs.”
The money that will be generated will be used to fund critical infrastructure projects and facility maintenance. The Moab Recreation and Aquatics Center costs $1 million a year to operate and needs substantial work in the millions of dollars. The city will be able to use the property tax to bond up to $20 million.
The public speaks
Joyce Viktor, 91, moved to Moab 65 years ago to work as a teacher. Her first “home” was a chicken coop. She didn’t live in the coop for long, but she was a teacher for decades and is still involved with the schools.
She is opposed to the property tax.
Heather Taylor, whose family has been severely affected by recent floods, opposed the property tax because she saw no mention of flood mitigation in the capital projects that would be funded by the tax.
Cricket Green opposes the tax saying, “I hope you’re prepared for foreclosures.” She said the city pays a lot of money on salaries.
Indeed, many in opposition cited high salaries in the city and the perceived inability of the city to “trim the fat.”
Other concerns opponents raised include the city’s $11 million Kane Creek Boulevard reconstruction project; the electric vehicle charging stations at Lions Park; the failed Mill Creek chipseal project; and why the city doesn’t do more with its transient room tax funding.
Once public comment ended, Langianese addressed some of those concerns. She noted the Kane Creek project is funded by the Community Impact Board, roughly 50% in the form of a low-interest loan and the other half in a grant. The grant percentage could have been higher if city residents were paying for some of the work, she said.
“It’s the same with the state and the feds,” said Langianese. Skin in the game. Pay to play. Whatever you call it, not having a property tax has harmed the city’s ability to get funding for major projects.
The charging stations were installed by Rocky Mountain Power, not the city. Langianese said other charging stations will be installed in more centralized locations in the future.
The Mill Creek project, clearly a fiasco, was the fault of the contractor, who has paid back a portion of the money it received and has agreed to eschew chip seal on Mill Creek in favor of a new coat of asphalt, work that will begin later this month and conclude in September.
Why doesn’t Grand County help?
“Folks are being hurt,” said Langianese. “We get it. Everybody up here knows how people will struggle.” To alleviate that hardship, the city is studying the possibility of offsetting the tax by lowering water and sewer costs. There is also a state program called Circuit Breaker Tax Relief, tax.utah.gov/relief/circuitbreaker, that helps people with property tax relief.
Langianese also placed at least some blame for where the city is at on Grand County, which collects millions of dollars in property taxes from city residents. “Collaborating with the county, we are totally on board with that,” she said. “Someone tell me one project the county has helped with the city?”
She said other than giving several hundred thousand dollars each year to help fund the city’s recreational amenities, the county has never helped fund a road project and has given zero money to the city to maintain the aquatics center.
Langianese also noted that while the city receives $2 million in transient room taxes, the county receives $8 to $10 million.
(Doug McMurdo | The Times-Independent) Though resolute in their willingness to reinstitute a property tax in Moab, the Moab City Council spent two and a half years studying the issue before holding a Truth in Taxation hearing Aug. 6
Councilors explain their positions
With the exception of Councilor Colin Topper, who’s typically sparing with his words, councilors offered heartfelt comments on why the tax was necessary. Luke Wojciechowski said the fact people will struggle with paying the tax “is not something we take lightly. I understand how any small additional expense can harm a family.” He also said, “There’s no good time to add a new tax.”
He said the longer the city waits to tackle its myriad infrastructure challenges, the worse and more expensive it will get.
He noted that Utah is not a rate-based tax system, but rather a business-based system. Other challenges include the fact that not all properties in the county are assessed at the same time. If the county were to assess all properties at the same time, rather than staggered in five-year increments, increases would be less shocking to the system. Finally, the fact Utah is a nondisclosure state means brokers don’t have to report what the properties they sell cost the buyer.
As for cutting costs, he noted the city is staring down $37 million in unmet infrastructure costs. Reinforcing Langianese, he noted that Moab residents pay $5 million a year in county property taxes and 72% of the commercial businesses in Grand County are situated in Moab, yet little of that money comes back to Moab.
Tawny Knuteson-Boyd thanked the audience for coming and for taking the opportunity to look at the issue on a “granular level.” “Every one of us knows this will impact people,” she said. “It will impact us.” She recounted her early years in Moab as the single mom of two teenagers and the struggles she faced making ends meet.
Councilor Kaitlin Myers assured the audience that she and her fellow councilors have “been so diligent.” At the end of the day, she said, the city has to be willing to put “skin in the game.”
In her first year after taking office in January, Myers is a former city employee, a fact that gives her institutional memory. Without that skin in the game, she said she understands the city would never be able to fund critical infrastructure.
She noted the city recently cut about $1.5 million from its budget when it negotiated a new contract with Canyonlands Solid Waste Authority.
It was Councilor Jason Taylor’s comments that seemed to quell the mood of the audience after several left the chambers in protest. Indeed, it was the August 2021 Truth in Taxation hearing that motivated him to seek elected office.
“Three years ago I sat in the audience and I said, ‘This is insane. We should not be doing this.’ At that meeting, I decided to run for council. I got elected and I came in thinking, “There will be no property tax. The city was doing alright and we were holding our own with day-to-day operations.”
His goal that first year was to help usher through the reconstruction of Kane Creek Boulevard. That was the one request he heard the most from constituents. At the time, the cost estimate for Kane Creek was $7 million. Also at the time, he began to realize how unique Moab was for not having a property tax.
He reached out to U.S. Rep. John Curtis for advice. He told Curtis Moab gets by with sales tax, licensing fees and a “little bit of TRT.”
When Curtis realized Moab didn’t have a property tax, Taylor said Curtis was stunned. “You’re trying to stand on a two-legged stool,” was Curtis’ response.
He spoke to a commissioner from Kane County, who told him that the county funds its infrastructure by “writing a check. We don’t finance any roads.” Moab, said the Kane Creek commissioner, needs to decide what level of service it wants to provide.”
At the same time, said Taylor, the state “was keeping an eye on us. He said he talked to Grand County commissioners and commission candidates, noting that 29 of the 30 hotels listed on the Discover Moab website are within the city limits.
“I’m glad so many people are angry,” said Taylor. “Why don’t they go to the county and ask, ‘Why aren’t you doing anything for us?’”
On a personal note, he said, “I’ve been asked, I’ve been threatened, ‘Is this the hill you want to die on?’ I could vote no and probably it’ll still probably pass and I’ll look good, but I’ve studied this … I know you guys are pissed as hell. We need your help.”
“This might be the hill I die on and I’m willing to take the hit,” he continued. “I feel horrible. This will be a big hit on families, but in five or six years we’ll be in a worse position.”
Langianese called for the vote and it passed 5-0. In a rare aside, she noted she wasn’t allowed to vote in city matters under Moab’s form of government, but if she could, she would have voted with her peers on the council
As a formality, the meeting concluded with the council voting, again unanimously, to amend its budget.
Taxes are due in November.