Leaders consider county-wide sales tax option
May 26, 2015
Summit County officials and leaders of the county’s six municipalities are weighing the benefit’s yield if an optional county-wide sales tax for transportation was adopted.
Matt Leavitt, Summit County accountant, introduced the option at the Summit County Council of Governments meeting last week.
Leavitt said the current mechanisms to generate transportation funding in the state are inadequate and were never adjusted for inflation.
"The value of a dollar in 1997 is not quite the value of a dollar now," Leavitt said. "Plus, a lot of those entities in the state have already used up those resources that were there for providing transit."
To remedy the problem, Utah lawmakers approved HB 362 this past legislative session after being urged to support local transportation funding.
The bill does two things: it changes the gas tax rate to a fixed 12 percent and allows local jurisdictions to enact a county-wide tax option that is allocated to transportation.
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Based on analysis by the Utah League of Cities and Towns (ULCT), the increase to the percentage rate would result in approximately $346,000 additional revenue for Summit County and its municipalities.
The other part of the bill allows for .25 percent increase to the sales tax on regular goods and services. Though the measure was already approved by the Legislature, a local election would be needed to enact the tax.
A .25 percent sales tax would be divvied up county wide, with .10 percent going to the municipalities and the unincorporated areas of Summit County, .05 percent going to the county, and .10 going to the two transit districts: Park City and Snyderville Basin. The .10 percent that would go toward the municipalities and unincorporated areas is also subject to a distribution formula based on population and point of sale.
The ULCT was generous in its estimates of how much additional revenue a county-wide sales tax would yield, Leavitt said, adding estimates were approximately $3.1 million for Summit County. Salt Lake County, for instance, could yield approximately $49 million from a county-wide option.
"They assumed that everyone will participate, but being realistic, not every county will," Leavitt said of the state’s 29 counties. "But even if only the top seven or eight counties participate, we will still be pretty close in that ballpark."
This particular sales tax allows for more latitude, even though it still has to be dedicated to transportation-related projects, Leavitt said.
The part of the bill regarding the gas tax doesn’t go into effect until Jan. 1, 2016. A county-wide option, which doesn’t have to pass this year, wouldn’t go into effect until after a local election. In fact, most officials at the meeting felt it would be extremely difficult and costly to move forward with a special measure ballot at this point.
"It would be hard to go forward with this election at because it is a municipal election cycle and we don’t have a strategic plan of how we would use these additional funds," Leavitt said.
County Council Chair Kim Carson said multiple entities have "some real concerns" because of the lack of plans in place for the use of the funds and the special election requirements.
"And we really wouldn’t even know what our real benefits are until we know what counties are participating," Carson said. "I would just ask that everyone go back to their councils and have conversations about it. And then give us the yes we do want to move forward with the ballot."
Kamas Mayor Lew Marchant said his city is in "drastic need" of transportation funding and offered his support of the measure.
Park City Mayor Jack Thomas said his city leaders are organizing their plans to address transportation issues for the future.
"The waiting doesn’t bother us but I think moving forward it would be advantageous to the county and the municipalities to outline the benefits to the community first," Thomas said.
Coalville Mayor Trever Johnson said he also supports the measure and was comfortable speaking for his council that they would, too. But he fully supported Thomas’s suggestion to wait.
Leavitt urged each municipality to draft some short-term and long-term transportation plans and goals to describe how the respective cities would utilize the money.
"We need to go through and evaluate the benefits of receiving this money and how we can implement that on a short, medium and long-term basis so we can tell the citizens we are not just taxing them for no reason," he said.
Another Council of Governments meeting may be scheduled toward the end of June to revisit the topic.
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