An independent research report has determined that the common method of counting all taxes and government fees overstates the financial burden shouldered by Utahns.
In the report, Utah Foundation recommended excluding tuition and optional fees from the calculation of the state’s tax burden.
Applying the recommended measure, Utah’s tax and fee burden ranking has remained basically flat since 1999, ranging from 16th to 14th highest in the United States, indicated the independent public policy organization researchers.
For fiscal year 2003-2004, Utah’s financial burden would rank 20th in the nation if only taxes were figured into the equation, noted the foundation.
By comparison, the financial burden shouldered by Utahns would rank fifth highest in the United States if taxes and all fees were counted.
On the other hand, factoring in taxes and mandatory fees into ther formula would place Utah in 14th highest position in the national rankings.
Utah’s largest fee category is college tuition.
Due to the state’s young population, a larger percentage of Utahns are enrolled in college.
The fact that the majority of Utah’s students attend public colleges and universities exaggerates the amount of government fees collected in the state.
Because Utah’s college enrollments expanded at the sixth fastest pace in the nation from 1997 to 2004, the increase in tuition revenues exaggerated the growth in the state’s fee burden, explained the foundation.
In some states, a significant proportion of students attend private colleges and tuition dollars are not counted as part of government fees, further inflating Utah’s ranking.
In addition to tuition, many fees reported to the U.S. Census Bureau are for optional services.
Examples include fees for school lunches, parking in public garages, recreation programs, golfing, rents in public housing, sales of agricultural products and medical services at public hospitals.
Highlights of the independent research report compiled by foundation include:
•Utah’s personal income tax ranks 17th highest in the nation.
•Utah’s sales tax ranks 13th nationally.
The state’s sales tax ranked ninth in 2002.
•Utah’s corporate income and property taxes rank low nationally.
The property tax has steadily dropped in the national rankings for years.
The drop is probably due to Utah’s truth in taxation law, which creates political pressure for reduced rates when property values rise, noted the independent public policy organization.
In addition, Utahns receive a 45 percent tax exemption on the value of primary residences.
•Utah’s motor fuel taxes rank 11th highest nationally, according to the latest data.
Part of Utah’s motor fuel tax ranking is influenced by longer driving distances in western states, noted the independent policy organization.
•In total tax burden, excluding fees, Utah ranks 20th nationally.
However, the majority of the western states rank lower, placing Utah fourth in the West.
•In total taxes and mandatory fees, Utah ranks 14th nationally and fourth among western states. Utah has occupied roughly the same position in the rankings since the mid 1990s.
“We’re not trying to say Utah’s overall tax burden is low, but it’s certainly not as extreme as being in the top five nationally. Nevertheless, comparing to the typically low tax burdens in the West, Utah does stand out, ranking fourth highest among the 11 western states,” pointed out foundation director Stephen Kroes.
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