By Zak Sonntag | [email protected]

The City of Holladay moved closer to its first ever tax increase with the release of a preliminary proposal that would hike the overall property tax rate by 5%, an initiative whose passage will be an uphill challenge for the council, and a hard sell to residents pinched by an ongoing pandemic recession.

Raising rates during a downturn presents a forbidding political gambit, and the inauspiciousness is not lost on the council. They are proceeding with trepidation with the knowledge they “may all be voted out of office for even raising the question of lifting property taxes,” said councilmember Dan Gibbons, who believes the city’s current conditions require “a robust conversation about raising property taxes for the first time in a generation.”

The willingness to move forward with a tax plan at this moment indicates a growing sense of urgency among city leaders who for years have quietly conceded that its revenue models are unsustainable, and that rate increases cannot be avoided if it’s to keep pace with the growing cost of public safety services and rehabilitate the city’s infrastructural “old bones.”

“Flat revenues and increased costs over time means we cannot maintain storm systems, bridges and sidewalks. Holladay has identified $57 million of unfunded project needs. Seventeen percent of our roads are in poor condition or near failing. When they fail, the cost of repair quadruples,” said Sabrina Petersen, the council’s longest serving member.

The overture discussed during an April round table with the public, got off to a shaky start when residents accused the council of manipulating  the numbers. 

“I can agree with you that the roads need repair. But I think calling a 50% increase a 5% increase is disingenuous. I haven’t had a raise in 10 years either. I’d appreciate a more conservative approach instead of 50% in one fell swoop,” said Holladay resident Martin Craven.

So is it 5%, or 50%? Actually, it’s both. 

Myriad entities have claims on a homeowner’s property tax—including Granite School District, Salt Lake County, and other special service districts. Holladay’s share of the tax pie amounts to 10%. The proposal lifts the city’s share to 15%, which would double its personal levy while only lifting the overall burden by 5%, or about $20 additional dollars per month on a household worth $750,000. Yet some residents see the city’s decision to emphasize the overall tax rate instead of the local rate as a manipulation.

Other residents are asking why, if the city’s infrastructure is in such disrepair, the council hasn’t done something sooner. By dallying, the city may have forfeited the option for smaller, incremental increases, and thus trapped itself in a corner where the only option is a sizable hike. Others are encouraging the council to proceed with frugality, deferring certain priorities, like trails and parks, and deliver only essentials. 

Steve Selcho, a resident whose home was annexed into Holladay, said, “We were happy to be annexed partly because of your city’s fiscal conservatism. Your fund balances are better than expected, but for a lot of residents of Holladay after this pandemic our fund balances are not better than expected, they’re worse than expected. Why don’t you pick a lower number, and see what you can do with that.” 

The city’s reputation for delivering a high quality of life on a frugal budget is largely by the grace of grants, reaped by city staffers who’ve cannily parlayed grant monies in a process of fund-matching mastery. However, the city is discovering grant funding has its limits. 

“We’ve known we can’t keep running the city like this for at least seven years now,” said Mayor Robert Dahle. “Previous councils have had that same conversation, and I understand why [previous councils did not act] because it’s not fun to go ask residents to pay for this stuff.”

Nonetheless, residents who’ve spoken publicly agree the underlying need is there, and the city’s infrastructure cannot be neglected much longer.

“I almost drove my Vespa into a sinkhole near Holladay Boulevard and Cottonwood Lane. I’ve seen failing infrastructure firsthand. These needs are past due and putting Band-Aids over the problem isn’t smart. We love our neighborhood, and though [a tax increase] will be a big bite into our monthly income, we’re still willing to pay our share because we love and care about our community,” said Juan, a resident living on Cottonwood Drive.

 “We’ve got a lot of data to support the long-term challenges of our infrastructure,” Dahle said. “Our first responsibility is to bring this to our citizens and say, ‘This is what we know.’ Our second responsibility is to say, ‘Look where we’ve come from. Protecting open spaces, getting parks, managing finances responsibly, and making the city way better than what we inherited in 1999. We feel a responsibility to communicate to our residents the challenges we face now. There is a political price to be paid, but someone’s got to do it. I’m willing to be frank with our residents.”