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Council members divided on Moab property tax: Proposed tax tabled ahead of Aug. 31 deadline

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At their regular meeting on August 10, the Moab City Council further discussed a property tax. The motion to implement a tax was tabled, but not before council members expressed their opinions and potential votes on the tax. The Moab City Council has been seriously discussing a property tax since May, and must vote on whether or not to implement a tax by August 31.

The council has been presented with five budget scenarios, generating between $0 and $3.3 million in tax revenue. The proposal is that the revenue be used for three things: infrastructure projects, such as sewer, water, and road projects; increasing police department staffing; and raising the city’s reserve funds.

The City of Moab hasn’t levied a property tax since 1992 and is one of only four municipalities in Utah that doesn’t enforce a property tax. For 30 years, Moab has been able to rely on the tourist economy. But according to city staff, Moab has a backlog of over $60 million in capital improvement costs. The Moab Police Department has said they anticipate needing eight additional officers over the next five years to manage traffic enforcement. And according to Finance Director Ben Billingsley, the “rainy day” fund is necessary in case of emergencies.

Residents argue that Moab’s tax burden should keep relying on the 3 million tourists that visit Moab each year, but city representatives claim that the taxes paid for by tourists—such as sales and use tax—have become too unpredictable to rely on. Sales tax revenue varies significantly depending on economic conditions. In addition, the council pointed out that while the sales tax in Moab is 8.85%, the city only keeps 2.8% of the revenue.

“There’s a disconnect with wanting to balance quality of life and affording the infrastructure projects we know we have in the pipeline,” Mayor Emily Neihaus said.

However, most citizens despise the idea of a property tax. At the August 4 “Truth in Taxation” meeting, the council heard from more than 25 citizens.

At the August 10 Moab City Council meeting, five citizens attended to express their dislike of the property tax. In an email discussing the city council meeting agenda, Councilmember Rani Derasary wrote that the overwhelming majority of correspondence she’s received about the property tax asks her to not implement it.

The council faces a hard decision. The motion to implement the tax was tabled at the August 10 meeting to allow more time for both the council and citizens to learn about the tax before the August 31 deadline, but some council members expressed their opinions and potential votes at the meeting.

“Property taxes are coming, folks,” Councilmember Mike Duncan said. He said that for three years, as he’s been on the council, he has listened to citizen complaints about hotels. As a council member two years ago, he voted for hotels to stop being built in Moab. But now, he said, citizens are asking for tourists, and hotel-users, to pay the bill. Citizens can’t have both, he said.

“You can either cut back on the visitor aspect of your experiences here in town, and look more like a typical Utah town in which property owners really do pay bills, kids, or you can continue to grow the tourist industry,” said Duncan, “which will certainly help with paying the bill. We’ve enjoyed a free ride now for the last 30 years.”

Duncan supports the option to generate $1 million in property tax—but he wants the level set low enough so that Moab’s property taxes are small compared to county property taxes.

Councilmember Tawny Knuteson-Boyd also expressed her support of a property tax.

“I don’t want to be a burden to this community. That’s why I am more than happy to pay the taxes that I will owe,” she said.

On the other side, Councilmember Karen Guzman-Newton said she still has questions about the tax, which she’s not confident can be answered before the August 31 deadline. She worries that the current proposition lacks vision and clarity. She lives near Pear Tree Lane, which is noted as a critical infrastructure project, but she has no idea why it’s critical, she said.

“I find that I don’t even think we know what we are signing off on,” she said. “To ignore what our constituents are saying, and under our leadership right now, I am not confident that I can go forward with a property tax.”

Guzman-Newton said that she is not fundamentally opposed to a property tax, but she thinks the council shouldn’t ignore the implications of some community members not being able to pay the tax, and she believes the wording of the tax has been divisive in the community.

“I’m very concerned that this property tax, like how it’s been portrayed, is that those others are not paying,” she said, referring to the differences between primary residents and secondary home-owners. Primary homes can get a 45% discount on their property tax, while secondary homes are taxed at 100% of their assessed value.

Many residents asked if secondary homes could be taxed without taxing primary homes, but the Utah state law doesn’t allow that. If a property tax is implemented, it has to be across the board.

Councilmember Rani Derasary said she will probably be voting against putting a property tax in place. She wants time to learn more about what a property tax would do to the Moab community specifically and how the city could use it as a tool.

“I do think there’s benefits to property tax in Moab’s future, but I don’t feel educated enough to feel like I am ready yet to choose one of those numbers for you,” she said.

Mayor Emily Neihaus, who will not vote, stressed that the property tax is for the benefit of the community. The infrastructure projects and worker salaries the tax revenue would fund would make sure there is clean water distributed to homes and businesses and that sewer water is treated responsibly, she said.

“We’re talking about taking care of our community with the funding,” she said. “It’s not like we’re going to Vegas.”

The council will likely vote on the implementation of the tax at their next meeting on August 24.