TO: All Members in Morgan County School District

RE: Proposed Tax Increase

Morgan County School District will be proposing an increase in property taxes on August 12th at 6:00 p.m. in the board room at 240 East Young Street, Morgan, Utah. School district officials are proposing an increase of the 10% of basic and capital outlay levies. Total proposed tax increase is 9.4% above the certified rate and is one of the highest tax increases being proposed by any school district, county, or city in the state of Utah this year. With this rate increase and other factors, school district tax revenues will increase by 13.1%.

Morgan County is also proposing a tax increase this year.

School district officials intend to use the additional revenue for building renovation, building reserve, property acquisition, and new construction.

If approved, the approximate property tax increase for $175,000 property would be $46.49 for primary residences and $84.53 for businesses.

District officials are stating the proposed tax rate increase is not really has high as advertised in the Truth-in-Taxation notices. This claim is technically correct but violates the spirit of Utah's Truth-in-Taxation laws. The district is increasing the capital outlay levy while partially offsetting this increase with a decrease in the debt service levy. However, when determining the size of a tax rate increase under Truth-in-Taxation laws, tax entities cannot use decreases in debt service levies to offset increases in other levies. This prohibition prevents tax entities from permanently increasing the base tax rate every time the district issues new debt. School districts should not automatically increase its other levies simply because its debt levy is being reduced.

Utah taxpayers are among the most heavily taxed in the nation. Utah's state and local tax and fee burden is now 9th highest in the nation and is 12.6% higher than the national average. Higher tax burdens lead to lower long term economic growth, and elected officials should seriously consider the negative impact higher taxes will have on economic growth and future tax revenues.

The Utah Taxpayers Association is concerned that the Morgan School District is considering a large tax increase. The Association encourages all taxpayers to attend the public budget hearing set for August 12th and make their opinions known.

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     *Please make copies of this Tax Alert and distribute them to
       residents of Morgan County School District.