96-068
Response
April 25, 1996
Request
W.
Val Oveson
Utah
State Tax Commission Chairman
210
North 1950 West
Salt
Lake City, Utah 84134
Dear
Commissioner Oveson:
This
letter is to request an opinion from the Tax Commission regarding a problem we
recently discovered in XXXXX County. While in the process of paying the
redevelopment districts in XXXXX and XXXXX, it was discovered the County had not
collected enough money to make the RDA whole in comparison to last year. The
amount short is approximately $$$$$. The tax rate had not been adjusted
sufficiently to compensate for the reduction in the uniform school fund by the
Legislature in the 1995 session. The County feels there are three or four
possible solutions.
The
County could tell the RDA's “sorry, better luck next year”. This would quite
possibly bring some legal action from them. The entities could be shorted in
their apportionments which may bring action from them. The County could make
the RDA whole out of its reserves. This is not very attractive to us given our
reserves are not large. The County would make them whole if it was given the
ability to recoup that money as part of the 1996 tax rate setting process and
be free from Truth in Taxation hearings. That is our request from the
Commission. It is our understanding your agency is taking corrective steps to
ensure this doesn't happen again in 1996 as the Legislature this year again gave
a property tax cut.
Thank
you for your consideration in this matter. If you have any questions, XXXXX in
your agency has been involved, as well as XXXXX and XXXXX in XXXXX County.
Please feel free to contact them.
Sincerely,
XXXXX
XXXXX
RE: Advisory opinion - RDA Shortfall
Dear
XXXXX
We have received your request for an
advisory opinion regarding the apparent revenue shortfall for RDA’s in your
area. We find as follows:
Section 17A-2-1205.5 of the Utah Code
provides for adjustments to the RDA’s base year taxable value whenever the
basic school levy decreases more than 20% in a year. In 1995, the school levy decreased about 40%, requiring an
adjustment in the base year value in order to provide the RDA approximately the
same amount of money it would have received had the levy not changed. However, our Property Tax Division
calculates the shortfall to be approximately $$$$$, not $$$$$ as stated in your
request.
We contacted XXXXX to discuss the
discrepancy between the county’s
figures and our own. XXXXX
assured us that the issue has already been resolved, and that the RDA has
agreed to assume the shortfall this year.
Apparently the miscalculation arose
out of misunderstandings about the rate setting process. XXXXX of our Property Tax Division is
revising the forms and working with your county to ensure accurate reporting in
the future.
If you have further questions,
please let us know.
For the Commission,
Alice Shearer,
Commissioner