About 1,500 homeowners in the Colorado City School District are refusing to pay their property taxes, fearing still-powerful leaders of the polygamist sect will banish them from the community.
It has created a standoff between officials from two states and the residents, who face possible eviction if they continue to obey polygamist leaders’ orders not to pay taxes. The impasse has prompted the district to ask the state for $2 million in loans to keep operating its three schools.
The State Board of Education agreed to a $711,629 loan this week. Now, district officials want lawmakers to pass a bill that would lend them the rest of the money and let them sell school buildings and use operating funds to make a bond payment.
It’s another sign that the state’s efforts to wrest the small community from polygamist control will be a long and hard battle.
The sect’s leader, Warren Jeffs, continues to exercise influence in the city despite being on the run from the state and the FBI over charges of sexual misconduct.
In December, the state put accountant Peter Davis of Phoenix-based Simon Consulting in charge of the school district’s finances under a new law. By January, Davis had canceled credit cards, sold vehicles, closed buildings and dismissed 18 employees.
He said that the schools are running more smoothly and that the state is in a good position to be paid back in full if the bill is passed. Without the help, Davis can’t keep the three schools open.
“We have a lot of financial problems,” Davis said. “If they don’t give us this bill, we could be in bankruptcy. That’s a fact.”
The situation is complicated by an unusual arrangement through which Colorado City residents occupy their homes and pay taxes.
About 60 years ago a polygamist sect near the Utah line formed the United Effort Plan trust and received large donated tracts of unimproved land. Through the years, the enclave was built on 1-acre lots allocated to members who joined the sect and remained in good standing. The members built their homes, but the trust had the power to order homeowners off their land if they violated the sect’s rules.
Now, most of the school district’s land belongs to the United Effort Plan trust, once run by Jeffs.
In May, a Utah court dismissed the board that ran the trust at the request of Utah’s and Arizona’s attorneys general. Bruce Wisan, a Salt Lake City accountant, took charge. Wisan said the trust never had a bank account. Homeowners simply gave their taxes to a leader of the trust, who then paid the county on their behalf.
Jeffs still holds sway over polygamist enclaves in Arizona and Utah, as well as its outposts in Texas, Colorado and British Columbia. The sect, the Fundamentalist Church of Jesus Christ of Latter Day Saints, is an offshoot of the modern Mormon faith.
Since Jeffs was indicted, he has ordered members of the sect not to pay property taxes or cooperate with the school district or a census the trust is conducting, Wisan said. If they do, they face banishment.
“He told them, ‘Say nothing, do nothing, sign nothing,’ ” Wisan said. “The FLDS members are in an extremely controlled environment where they live, and leaders have told them not to pay property taxes.”
That puts families in difficult position. About 250 district homeowners have paid their property taxes, but none lives on United Effort Plan land, Wisan said. No family has been banished for paying taxes. Wisan could make sure those who did pay their taxes kept their homes. However, Wisan said, in the past families banished from the sect were shunned by other members and the men left on their own. Many times they left behind wives and children, who were then assigned to another man.
“If you have the option of cooperating and being excommunicated, or not cooperating and being a member in good standing, what would you do?” he asked.
Wisan said there is about $1.3 million in cash in the trust, but the money is being used to survey the land it owns, breaking up 40- to 80-acre parcels into individual lots that the residents would own. That would speed the effort to collect property taxes or sell the property and pay back the loans.
Mohave County Treasurer Lee Fabrizio said if property owners continue to hold out, state law permits him to sell the tax liens and move families out of their homes within three to five years. Fabrizio said buyers are eager to move into the area, which is nestled in red cliffs and pine forests 50 miles from St. George, Utah.
The State Board of Education agreed Monday to lend the district $711,629, the estimated amount of property taxes that won’t be paid this year. Now, lawmakers are considering a bill that would give the school a $l.3 million interest-free loan to pay off a debt to the Arizona Schools Risk Retention Trust, which acts as an insurance company for schools.
The bill also would allow the district to sell off school buildings without a public vote and pay off a $135,000 bond payment due in May out of operating funds.
The Colorado City Fire Department is the only other agency that depends on property taxes. Mohave County treasurer officials said that it receives $311,500 a year in property taxes but that this year, only about 30 percent of that money has been paid.
The chief of the Fire Department and the city’s mayor did not return calls on Wednesday.
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