DEMOGRAPHICS :: GOVERNMENT/TAXES

General | Living | Government/Taxes | Business

Form of Government
In a special election on October 21, 1980, the citizens of Orem voted to adopt the council-manager form of government as authorized by State law for municipalities. Since January 1, 1982, the City Council has consisted of six council members and the mayor, all of whom are elected at-large. The mayor and council members serve staggered four-year terms.

This council-manager form of municipal government, common to mid-size American cities, functions much like a private corporation, with a chairman and board. This structure benefits the business community because it eliminates political mayoral elections and allows the city to focus on important issues. The council-manager form capitalizes on the basic tenet of American democracy--the separation of legislative and executive powers. The council assumes the legislative or policy-making role of the community, while the manager assumes the executive or administrative role.

Taxes
Inventory Tax Exclusion: Utah state law prohibiting the levying of ad valorem takes on inventory of any kind within the state of Utah. This exemption of taxes on inventory makes operation of inventory-intensive industries much more economical than in other states without the exclusion.

Property and Sales Tax: Property tax is 1.0684 percent of assessed value. Residential properties are only responsible for taxes on 55% of market value, whereas businesses must pay based on 100% of market. Sales tax is 6.25 percent, with the tax being levied to the final consumer. In 1985, the state passed legislation which exempted machinery or equipment for all new or expanding manufacturing industries from sales tax.

State Personal Income Tax: The individual adjusted income tax rate is a graduated rate separated into six brackets that range from 2.3 percent to a maximum of 7.0 percent. Some variations from these rates exist depending on whether separate or joint returns are filed and upon the income level.

Sources and Uses of Funds
One of Orem's trademarks is its careful management of financial resources. As a regional retail giant, sales tax revenue is by far the most significant financial resource for the city as well as a determinant for how city funds are allocated.

In Orem, as in all cities, personnel services constitute a major operations expense. It is significant, however, that the number of city employees has decreased from eight per one thousand to just over five per one thousand over the past five years. This is contrary to the general direction of city governments, where a steady increase in administrative staff has accompanied growing populations in a majority of U.S. cities.