Every spring, it’s common for Utah municipalities to propose a tax increase. But for Utah’s two newest municipalities, that’s not an option.
Ogden Valley City in Weber County and Spring Lake in Utah County both voted to incorporate in the fall of 2024 and elected their councils the following year. After the election results were certified, they had 30 calendar days to submit documents to the Lieutenant Governor’s Office. In turn, the office had 10 days to issue each the certificates of incorporation, making Ogden Valley City and Spring Lake officially independent.
In Ogden Valley’s case, one document was missing signatures and had to be resubmitted, so it wasn’t certified as a new city until Jan. 2. And here’s the rub: under Utah State Tax Commission rules, the city cannot charge taxes for the upcoming fiscal year because it was not incorporated on the first day of the calendar year.
Janet Wampler, mayor of the new city, isn’t pointing fingers. She’s frustrated with a process where there’s little guidance for a new city or town. She and the city council, who are all working for free, labored through Thanksgiving and Christmas to get their documents ready, she said.
“We sacrificed, you know, all personal and private interest to make sure this happened. And the idea that we have one day of a missed date is disheartening, to say the least.”
The issue is especially pressing in Ogden Valley City because the state-mandated incorporation feasibility study overestimated revenue and underestimated costs, Wampler said.
Nothing’s off the table in her search for a solution. She would like for lawmakers to pass a bill to make it easier for new municipalities to levy property taxes for the fiscal year that begins after they incorporate. While she’s talked with sympathetic lawmakers, she acknowledged that getting the Legislature to convene a special session is a tall order.
“Very few people are excited to push forward legislation that involves tax increases during an election year,” she said during the city council’s May 11 work session.
If the city does manage to find a way to become a taxing entity for fiscal year 2027, it is looking at a 519% increase in one part of its property tax, which works out to about an 8.6% increase in overall property taxes. That’s $555 for the average residential property, according to the city’s financial adviser.
If the city can’t charge taxes until the next fiscal year, which begins July 1, 2027, they are considering a transportation fee to pay for roads. Wampler said that isn’t ideal because it doesn’t adjust for income or extenuating circumstances and adds to staff workload. There’s also the potential for donations, loans or agreements with the county to share revenue from its unincorporated area fund.
If the city can’t levy taxes, residents will continue to pay property tax to the county, which will then allocate funds to the city. In that case, state law prevents the city from cutting services to reduce costs.
“The only way I know how to balance a budget is either increase your revenue or decrease your expenses, one way or the other,” Wampler said. “And right now we've got those two different laws holding our hands there.”
Spring Lake submitted its documents on Dec. 18 but wasn’t certified as a town until Jan. 16. The Lieutenant Governor’s Office told KUER that the original submission was insufficient, and the complete documents were not submitted until Jan. 5.
Until KUER contacted Mayor Wade Menlove for this story, he was unaware that the town could not go through the typical Truth in Taxation process this year. He declined an interview request so he could look into options before speaking publicly.
Justin Lee, deputy director of the Utah League of Cities and Towns, used to work in the Lieutenant Governor’s Office. He said incorporation is a messy and emotional process that’s constantly being tweaked.
While the league helps train newly elected officials on how to run a city, there’s little guidance beyond written laws about how to get a new city off the ground.
“There's not a state office of new cities — that doesn't really exist,” he said. “There's no one to sit down and walk you through every little thing.”
It might be too late to figure something out for this year, he said. If a city is struggling to cover its budget, it could try to negotiate with the county or other providers, but he doesn’t see an easy solution.
In Ogden Valley City, when residents hear about the financial situation, many think the answer is to unincorporate, Wampler said. But state law requires the city to wait two years before trying to dissolve.
If the new city were a young adult moving out of its parents’ — or in this case, the county’s — house, Wampler said it would be an oversimplification to say they’re realizing that everything is more expensive than planned.
“It's as if we had a parent come in and say, ‘Launch out. You're good. You have a trust fund you can pull from. In that regard, you have more than enough money to pay your bills. You go out there, and you make your way in the world.’ So we went out, and it turned out that the bank account was empty and the bills were already coming in, and we don't have the ability to change the bills.”
Macy Lipkin is a Report for America corps member who reports for KUER in northern Utah.
