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SALT LAKE CITY — Cheryl Johnson has lived in the same home for 60 years. The original stucco structure sits directly on the ground without benefit of a concrete foundation, and the property taps water from a well in the backyard.
In contrast to the home's oldfangled charm, Johnson has watched her surroundings transform from a once bucolic pastureland into the budding modern city of South Salt Lake.
"When we moved into this house there was nothing but fields and horses, pheasants running everywhere. Now we have apartments all around us," Johnson said.
The area's rural character is not the only thing that's changed in Johnson's time here — the price of real estate, too, has transformed from the moment in 1959 when the Johnsons bought their home for a grand sum of $10,000 — a world removed from the $455,000 price tag for the average home in her neighborhood today.
Despite inherent benefits to property appreciation, it simultaneously puts some homeowners in a pinch as creeping tax rates have made the cost of staying put harder to bear, and it places Johnson among a swelling contingent of "house rich, cash poor" Utahns who see increasing portions of their fixed incomes gobbled up by the yearly levy.
As many as 40,000 Utahns living on low and fixed incomes are straining to make property tax payments against steady rate increases and an ever marching housing market, according to a new Tax Modernization report from the Kem C. Gardner Policy Institute released this month.
Untapped tax relief
The good news is that state and county relief programs exist, including the Circuit Breaker program, which allows the reduction or abatement of property taxes on some Utahns' principal residences. However, the program's meager enrollment — currently less than 20% of those who qualify — is raising questions about its usefulness and implementation, while leaving some to wonder if leaders have done enough to get help to elderly Utahns straining to remain in their homes.
"We know there's many more who qualify for relief but who don't know about it. That's one of my biggest frustrations in office is that the word hasn't got out despite our efforts," said Wayne Cushing, Salt Lake County treasurer. His office oversees the county portion of the program that divvies out breaks on a sliding scale to those making between $12,174 and $35,807.
"An extra $1,000 to $2,000 of annual spending makes a big difference for somebody with such low income," he said. "It helps them afford other necessities like prescriptions and food."
County efforts to spread the word include presentations at charitable and religious institutions, and marketing campaigns. Still, for a relief program that's been available for over 30 years, the modest participation calls up questions about what the growing demographic of indigent elderly are sacrificing in order to stay put.
"Obviously, the goal is not ever to tax somebody out of a home, so that's what we're trying to prevent," Cushing said.
Program is a godsend
Those like Johnson who've discovered the program say Circuit Breaker relief is a godsend during a phase of life when memories and proximity to an established community have an outsize impact on quality of life, which is why selling, even for a handsome profit, is still a last resort.
"I wouldn't trade my home for anything. I wouldn't trade it for a brand new home. I've got too many memories in this home," said Johnson, 80, who explained the intangible value of her residence is irreplaceable after a lifetime of memories, including raising three children, and running ad hoc ventures from the living room to earn extra money, including a day care, an artisan wig service and a laundry.
Johnson began to struggle with property tax payments when her husband died of leukemia nine years ago. Medical expenses drained their savings, and with no life insurance policy, she saw growing portions of her fixed income swallowed by property taxes, a problem faced by a many Utah retirees.
"My husband passing really put a hardship on me. I was struggling. I don't know what I'd have done if I didn't find this program," she said.
An interconnected issue
Johnson provides an example of how issues involving property, retirement and health care are often interwoven, and underscores the need for smart property tax policy in a state with an aging population and ongoing housing challenges, something the Gardner Institute hopes to promote with its new report.
"Property taxes and tax systems are complex and can be hard to navigate. That's why we make these reports — to help inform," said Phil Dean, author of the tax modernization report. He emphasized "that just because housing prices increase, it doesn't necessarily mean the property owners taxes go up because of how our truth-in-taxation process works."
Utah's truth-in-taxation law requires taxing entities to undertake a rigorous public hearing process before raising rates while also controlling for the impact of rising property values by using a "certified rate" that adjusts tax percentages downward as market values increase to keep owner's receipts consistent.
Still, rates do rise, and part of what makes the system confusing owes to the fact myriad entities have property taxing authority — including cities, counties, school districts, police and special service districts like waste and recycling — that undertake differing rate hikes independently.
Over time these independent rate hikes have put elderly Utahns like Johnson closer to the margins, and it's why economists at the Gardner Institute are eager to educate leaders and the public about the tax's multifaceted implications, with the hope of enabling homeownership for Utahns from young adulthood all the way through their twilight years.
"Until I was married I never lived in a home, I'd always lived in apartments, so it was a beautiful thing to get into this home. Back then we paid $75 a month for it," Johnson said. "My home is my everything. It's old, but I wouldn't trade it for anything."
