06/19/2025
Why a Property Tax Increase Is on the Table
Here are the slides from my presentation at last night’s Talkabout, along with an expanded version of what I shared. Ivins is facing a $540,000 structural deficit in its proposed FY2026 budget. That number reflects the shortfall just to maintain core services like police, fire, EMS, parks, and road maintenance, with no new programs or reserve buildup, and without funding several important capital projects in our 5-year plan.
This deficit isn’t the result of overspending or bloated government. I know, that’s a hard line for some to believe. But please stick with me for a bit. It’s actually the result of three converging realities: (1) Fifteen years of inflation with no tax rate adjustment. (2) Population growth that increases demand across every department. (3) A shift to higher service levels, especially in public safety.
Let’s look at those one by one.
Note: This article includes 7 charts and tables that go with the issues I’m discussing. Unfortunately, social media doesn’t let me format things cleanly—so while all the text is included here, it’ll be much easier to read (and follow) on my website, where the visuals appear with each topic: https://www.mikescott4ivins.com/?p=4709
1. Inflation: You Can’t Run Tomorrow’s City on Yesterday’s Dollars
Ivins has not raised its property tax rate since 2010. Under Utah’s “certified tax rate” system, cities are required to lower their rates each year to keep total property tax revenue from existing homes flat, no matter how much property values increase.
This system protects homeowners from automatic tax increases. But it also means cities fall behind unless they intentionally raise the rate through a Truth in Taxation process.
Since 2010, inflation has risen more than 50%. That means the dollars we’re collecting today buy only about two-thirds of what they did when we last adjusted our tax rate. If Ivins had increased taxes slowly to keep pace with inflation, we wouldn’t be here. But because we didn’t, we now face a bigger jump just to catch up.
2. Growth Helps. But Not Enough
Growth brings new tax revenue, but it also brings more roads to maintain, more service calls, more wear on infrastructure, and more pressure on staff. And while new homes pay impact fees to cover the cost of building infrastructure, they don’t cover the cost of operating and maintaining it year after year.
Since 2010, our population has grown by more than 70%. During that same time, our total property tax revenue has gone up by about 80%, but only because of new homes being added every year. But they get "locked in" as well, so their taxes don't go up either.
The added revenue from new homes has been consumed by the cost of serving them. That leaves us still trying to fund everything with inflation-eroded dollars, a strategy that’s finally breaking down.
As Ivins grows, there are simply more people to serve, more homes to protect, more roads to maintain, more emergency calls to answer, and more wear and tear on parks, streets, and equipment. Then layer on inflation, the rising cost of everything from asphalt to employee health insurance to police vehicles and even standing still becomes more expensive.
You can see how this combined hit of growth and inflation works in real life when you look at the trend in law enforcement costs. It makes sense that as our city grows, there is more territory to patrol and more calls to respond to. And it makes sense that almost everything our Police Department needs to operate has gone up in cost significantly since 2010.
3. Better Services Cost More
We’ve also made important service improvements that residents have consistently said they value. Five years ago, Ivins relied mostly on volunteer firefighters and EMTs. I realized almost as soon as I got on City Council in 2022 that the Center Street station wasn’t even staffed full-time. We acted swiftly to correct that problem.
Today, both fire stations are staffed 24/7 with full-time personnel. That change alone costs the city at least $500,000 a year, but it means faster emergency response, greater safety, and better outcomes for our growing and aging population.
We’ve also expanded police coverage and invested in park and trail maintenance, all while staying well below average for staff per capita compared to other cities in Utah.
How We’ve Avoided a Tax Increase (Until Now)
You may be wondering: if we haven’t raised the tax rate in 15 years, how did we manage until now? The answer: one-time revenue. Over the past five years, we’ve relied on nearly $2 million in temporary funding to balance the budget, including: $1.3 million in federal COVID relief (ARPA funds) and over $500,000 in interest on developer warranty bonds.
But that funding is gone. The ARPA funds have been fully spent. And this year, the Utah Legislature passed a law requiring that future bond interest be returned to the developers, as it arguably should have been all along.
Without those one-time boosts, we’re facing a real and growing gap between income and expenses. Actually, without those one-time boosts, we would have been having this property tax discussion four or five years ago.
What Are Our Options?
(First, a quick disclaimer: These are my personal views, not the official position of the City or the City Council.) At last night’s Talkabout, I presented three scenarios for closing the deficit. And no, I didn’t suggest cutting staff, slashing salaries, or scaling back basic services. I know that’s the first thing some people expect to hear. But here’s the reality: we’ve already spent months reviewing and tightening every line of the budget. What’s left isn’t fluff; it’s the core of what keeps the city running. Here are the three options I addressed:
#1: A $540,000 property tax increase covers basic operations but drains reserves and our capital projects funds. In fact, we won’t have enough in the capital projects fund to do all the capital projects we have determined are needed over the next five years.
#2: An $860,000 increase covers operations, builds reserves to our target level, covers the capital projects we need to do over the next five years, but still leaves our capital projects fund balance dangerously low, in fact, limping along near zero. That leaves no room for surprises. That's not a good place to be.
#3: A $1.35 million increase fully adjusts for inflation since 2010, builds reserves to our target level, and rebuilds the capital fund, potentially growing it to $2.5 million by 2030. That sounds great, but we’ve got $3.5 million in that fund now.
To be clear: I am not advocating for the $1.35 million increase. But it’s important to understand what it would take to truly get back to where we should be. I'm really hoping that we don't need to go that far because we will see a more significant increase in sales taxes and transient room taxes than we're projecting from Black Desert and Hidden Springs Resort.
Right now, I’m leaning toward the middle option, a tax increase of $860,000. That would help stabilize our finances without going overboard. It would add about $122 per year to the tax bill of a primary residence assessed at $750,000, or about $10 per month.
What About Black Desert?
This is the question I hear most often: Why raise taxes now when Black Desert is finally coming online? Sales and room tax revenue from Black Desert is growing, and could eventually exceed $1 million a year. But the resort is still under construction, and the full financial benefit will still be several years away.
That future revenue doesn’t erase the damage done by 15 years of inflation and inaction. And it won’t shield us from future cost increases unless we put ourselves on firmer footing now.
That’s why I view this tax increase not as a way to expand government, but as a way to repair the foundation so we can move forward responsibly.
The Path Forward
This is not a one-time discussion. The formal Truth in Taxation public hearing will be held August 14 at 6:00 PM at City Hall. Between now and then, we need your input, and then your comments at the public hearing.
You may support a tax increase. You may oppose it. Or you may still be deciding. Whatever your position, I hope you’ll be part of the conversation. Because the decisions we make now will shape Ivins for years to come. We should make these decisions together, with facts, transparency, and mutual respect.
As always, contact me at [email protected] if you’d like to talk further. Thanks for staying engaged.
