Property Taxes

How much are my taxes going up?

American Fork City budgeted a property tax change that equals $9.99 more per month for the average home in American Fork (2021 average home value is $550,000). This equates to a 4% increase in total property taxes paid by a resident but allows the City to fund an additional $1.2 million dollars towards roads and public safety.

The last time the City raised property taxes was in 2008 (14 years ago) to fund road improvements. The City has no record of the last time property taxes were increased by the City prior to 2008. The 2008 property tax increase equals an additional $500,000 in today’s dollars. All those dollars have gone, and will continue to go, towards roads. 

What will this tax increase be used for?

This property tax increase will be used to help cover increasing public safety costs and road improvements. As the cost of road materials increases year after year, American Fork’s road projects get more expensive, forcing us to reduce how much we can get done with the same amount of money. This property tax will help us maintain and increase our level of road maintenance and improvement. Additionally, due to the technical nature of public safety, wages and equipment costs have increased 143% over the last decade. Public safety is an essential service, and we need to stay competitive to attract and retain good employees. 

However, as the cost of road materials increases year after year, American Fork’s road projects get more expensive, forcing us to reduce how much we can get done with the same amount of money.

What has the City done to avoid this?

American Fork City tries hard to be as efficient as possible to tighten our belt and avoid increasing taxes as much as we can. Every year the City seeks after, and receives, tens of millions of dollars in grants to help subsidize operating and capital expenses. That represents many services we can provide that our residents don’t have to pay for. Additionally, some City departments have not increased personnel for over a decade, while other departments have actually reduced personnel as they have incorporated technology to be more efficient.

Another way we have tightened our belt to reduce fees paid by residents is through technology and project deferral. We have utilized technology and efficiencies that allowed us to absorb rate increases from other entities like TSSD (sewer) and North Pointe Solid Waste (trash). These are increases that have routinely been passed onto the residents in other neighboring cities. additionally, we have decided to go without and delay non essential projects in order to defer other utility rate increases. Recently an outside firm did a study of our water rates relative to our capital needs and recommended that a small increase happen immediately. Our council decided to hold off on the increase to see if their are more efficient ways to do things.  

In addition to the ways American Fork City has tried to operate efficiently and reduce costs, American Fork City has also been reducing our property tax rate over the years, meaning the City has not actually collected more in property taxes from its existing residents. This has happened because of something called the Certified Tax Rate, a state mandated system in which Utah cities’ property tax rates are automatically adjusted down as home values increase. The result is that residents don’t pay more in taxes even if their home values increase. This also means our City’s revenue remains stagnant, even if the cost to provide the same level of services goes up due to inflation, which it has. Because of this American Fork City is still operating at 2008 property tax revenue to fund services that cost the City 2022 dollars to provide.

What's next?

Public discussions for this began in February and have included over ten public meetings, an open house, social media, newsletter, text, email, and website communication. We will have another public hearing on August 23 regarding the tax rate change before council formally adopts the rate on August 30.

In the future American Fork City would like to consider what’s called a “pegged” property tax rate. That is when American Fork City chooses to keep our property tax rate the same as the previous year rather than allowing the certified tax rate to lower it. That would allow the City to cover cost increases related to inflation. Municipal taxation laws require the City to call that a tax increase to residents, even though we are only wanting to keep our tax rate the same as the previous year. To learn more about how the certified tax rate works please read our City’s Residents Want to Know article on how property taxes work.