There are several errors in the calculations relied on by the Ivins City tax opponents. Without presenting my opinion on the tax hike here (it is available elsewhere), I am correcting those errors in detail in this essay. I used the spreadsheet provided by that group, stated to be the basis for their claims. In this discussion, I am restricting myself to the property tax issue alone. Warning: this gets a bit geeky, but it is necessary in order to be accurate and correct.
Error #1: Adding the percent change in inflation and percent change in population.
Spoiler alert: It involves some multiplication, not addition.
The tax opponents have taken the change in population from 2019 to 2026 (predicted to be 24.6%) and added that to the change in consumer price index from 2019 to 2025 (CPI, inflation; measured at 28%). They claim that this addition is the value to compare other values against, and find 25% + 28% = 53%, assuming that this might be the expected increase in the cost of goods and services for a larger population in the face of inflation.
But just because the numbers are both expressed in percent changes doesn’t mean that they should be added. Here is a simple example of that fallacy:
- Assume you have a family of 10 people, and you take them to a restaurant where each meal costs $10. The total bill will be $100, of course.
- Now assume that some time later, your family has grown to 15 (a 50% increase) and you go to the same restaurant, where you know that their prices have gone up by 50% as well. If you add those two values, you will expect your bill to have increased by 100%, and anticipate a bill of $200.
- But the waiter has calculated it differently: he or she says that 15 people, each buying a meal for $15 (the 50% increase over $10), comes to $225 (get out your phone’s calculator to confirm that $15 x 15 = $225). This is an increase of 125% over the earlier total, not an increase of 100%.
If we apply this correct math to the numbers the anti-tax group used for inflation (28%) and population growth (25%), we find that the true combined effect is 60%, not 53%. That is, the expected cost of goods and services in the face of population growth and inflation is 60%.
But wait, there’s more.
Error #2: Use of predicted population growth and tax revenues in 2026 and combination with actual inflation only to 2025.
Spoiler alert: We shouldn’t use seven years of population growth or tax revenues to compare with inflation over six years!
There are two possible approaches to this problem: One approach is to predict various values for 2025-2026; the tax opponents used numbers that imply a CPI inflation of 0% for 2025-2026 while calculating tax revenues that grow from 2025-2026. The other approach is to restrict our calculations to the years for which we do have reliable data, and that would be up to the present time, 2025. We will use the second approach here, and avoid problematic predictions of CPI; this also means not predicting the growth of population for 2025-2026, but sticking to numbers for which we have hard data.
Using the actual data from 2019-2025, we find that the inflation is, as stated earlier, 28%. The population growth has been 22.5%. Using the correct approach to combining the two effects (explained above), the combined effect of growth and inflation is found to be 57% for 2019-2025.
We should then use the FY25 tax revenue data for comparison (rather than the predicted tax revenue for 2026), and we observe that the City’s property tax revenue has gone up by 45%. Because the cost of goods and services for the increased population in the face of inflation has gone up by 53%, we find that the City has kept up with (45/53 =.85) only 85% of the combined increase.
Note: The author of the spreadsheet has clarified one aspect of it that was not clear from the spreadsheet alone. He compares 2019-2026 data with inflation for 2018-2025, so it is indeed seven years in each case, just not the same seven years. I use 2019-2025, because I want to stick with data instead of wishful thinking, and the actual number for inflation is 26.2% rather than the 28% I cited earlier. This slightly changes my results by a tiny amount, but the point is the same: use identical time periods for analyses, instead of comparing one time period of income or expenses and a different time period for inflation. Again, I choose to use time periods for which we have actual data, and not what we think the data will show in the future.
Oh my gosh, there is even more!
Error #3: Using population growth instead of household growth.
Spoiler alert: Property tax is per household (or residence), not per person, and city expenses correspond more closely to residential units than to the number of people in them.
Property tax is levied by residential-unit owners. That is perhaps best captured by “residential utility hookups” and this number is available from the City. Again, we are using inflation through 2025, so we use actual numbers to the present time, and not estimated numbers for the future.
It turns out that the number of households has increased at a greater rate than the increase in population. This is likely due to a number of factors, and the ones that come to mind are: (1) grown children leaving their parents’ homes; (2) couples losing partners due to divorce or death; (3) retirees moving into the area with fewer people per household than existing families, on average. In any case, we find that while the population growth from 2015-2019 was 22.5%, the household growth was 25%.
Using this household growth value (25%) and the inflation from 2019-2025 (28%), we find that the combined effect on Ivins City cost of goods and services is 60%. Remembering that the City’s property tax revenue has gone up by only 45% during that time, we find that the City has kept up with (45/60 = 0.75) only 75% of the combined increase since 2019.
The Bottom Line
Ivins City’s property tax revenue has not come close to keeping up with inflation and the growth of households in the past several years. There are other sources of income that mitigate this to some extent, and the tax opponents incorporate some of that in their modeling. Those other sources are not discussed here; this has been complicated enough. But the scientist in me would not allow these errors in arithmetic (adding where multiplication is needed), logic (using one time period for some numbers, and a different time period for others), or basic assumptions (population instead of households) to stand without correction. For the case of combined growth and inflation, we see that the effect is 60% over 2019-2025, and not 53% as claimed for 2019-2026. This has meant that the City has recovered only 75% in property tax revenue compared with growth and inflation from 2019 to the present time.
