The City of Moab has had a property tax in place for many decades. However, since 1992, the City has set the property tax at a rate of 0% (zero), meaning that Moab property owners have not paid property tax to the City for almost 30 years.
Moab is one of only four cities in Utah that does not levy a general property tax to pay for city services. The other 3 cities all have levied a special property tax to pay for Law Enforcement.
Currently, sales and use taxes are the primary sources for City general fund revenues. Annual revenues from sales and use taxes vary from year to year, while property taxes provide a reliable annual revenue source that can help stabilize the City's ability to fund critical services, including law enforcement, and basic infrastructure needs such as water, sewer, and roads.
For those reasons, the Moab City Council in May 2021 decided to consider increasing the property tax rate as a way to establish a more diverse revenue stream and reduce the City's dependence on sales tax revenue that relies solely on the expansion of the tourism economy.
Learn More About the Proposed Property Tax
Community Open House for
Proposed Property Tax Increase
Wednesday, July 14, 4-7 p.m.
Moab City Hall
City staff will provide information and answer questions
Make Your Voice Heard
Truth in Taxation
Wednesday, Aug. 4, 6 p.m.
Moab City Council Chambers
City Council will take public input on the proposed property tax increase
How IS THE TAX RATE DETERMINED?
To increase property tax revenue cities are required to go through the Truth in Taxation Process. The City Council has determined that total property tax revenue -- if the tax rate is increased -- will not exceed $3.3 million.
The City of Moab will hold a Truth in Taxation public hearing on August 4, 2021, at 6 p.m. in the Moab City Council Chambers. Council members will take input from City residents during this hearing.
After the Truth in Taxation hearing, the Council will decide whether to increase the property tax rate, and how much that rate will be. The Council could decide to leave the rate at 0% (zero property tax revenue) or to increase the rate to a level between 0% and up to $3.3 million. In any case, the amount of property tax collected cannot exceed $3.3 million in revenue.
Summary of possible revenue and cost for typical properties
The Lower Quartile is the property valued at 25% of all of that property type, Median is the middle valued property, and Upper is the property valued at 75% of all properties of that type. Please note: Taxable value is the value including any discounts applied to property taxes, such as the 45 percent discount applied to all primary residences.
Who will pay the property tax?
Primary tax is based on the market value of a property, inclusive of land and improvements (buildings). There is a primary residence discount, which exempts 45 percent of the property value. The discount applies to both the home and one acre of land. Lots larger than one acre receive the discount on the first acre, and pay the tax on the full market value of property exceeding one acre. This also applies to properties being used as long-term rentals. Secondary homes and commercial properties are taxed at the full market value.
The Grand County Assessor sets the value of properties. For primary residences, 55 percent of that value is taxable.
Percentage of overall property tax paid on the different types of properties based on total taxable value:
- Primary residence – 26%
- Non-primary residence – 11%
- Commercial properties – 56%
- Other – 4%
How would the City use the revenue?
The current City Council has identified the following as important underfunded needs:
- Police Department
Police staffing is well below desired levels. The Police Chief estimates Moab needs a minimum of 8 additional police officers within the next 5 years to provide reasonable responsiveness to emergency and non-emergency calls and traffic enforcement.
- Capital Improvements
The city has a backlog of over $60 million in Capital Improvements, primarily basic infrastructure such as water, sewer, and roads. Much of this is long-term deferred maintenance. The City has identified $14.4 million in critical projects to complete in the next five years. Some of this amount may be funded by grants and loans dependent on the revenue provided by a property tax.
- Rainy Day Fund Reserve
Responsible fiscal management dictates that the City have a reserve fund for emergencies. The current Rainy-Day Fund has dropped to 8%. The target should be 25%.
Where Your Annual Property Taxes Go
Moab City property owners currently pay a property tax to 11 primary entities. Taxing entities rolled into the <2 percent category include:
- County Assessing and Collecting
- Moab Mosquito Abatement
- Grand County Cemetery
- Library - Debt
- Charter School State Levy
- Multicounty Assessing and Collecting
If Moab City adopted a tax revenue at $3.3 million, the City portion would increase the total property tax bill by approximately 20%. It would represent about 26% of the overall tax bill collected by Grand County.
Possible Property Tax Funding Scenarios
Depending on the level of revenue approved by the City Council, the property tax could provide funding for the following over a 5-year period:
- At a $1 million revenue level -- hire 2 new officers within 5 years
- At a $1.5 million revenue level -- hire 4 new officers within 5 years
- At a $2 million revenue level -- hire 8 officers within 5 years
- At a $3.3 million revenue level -- accelerate full staffing of 8 officers within 5 years
- At a $1 million revenue level -- Fund 29% of critical Capital Projects.
- At a $1.5 million revenue level -- Fund 44% of critical Capital Projects.
- At a $2 million revenue level -- Fund 51% of critical Capital Projects, and have capacity to bond for the remaining projects if desired.
- At a $3.3 million revenue level -- Fully fund critical Capital Projects within 5 years.
Rainy Day Reserve Fund
- At a $1 million revenue level -- Build reserve fund to 15%
- At a $1.5 million revenue level -- Build reserve fund to 19%
- At a $2 million revenue level -- Build reserve fund to 24%
- At a $3.3 million revenue level -- Build reserve fund to 35%