UPDATED: Summit County approves pair of sales-tax hikes
June 27, 2018
Summit County's sales tax rate will increase for the second time in as many years after County Council overwhelmingly voted to raise the current rate to generate revenue for critical transportation-related improvements.
County Council members on Wednesday spent nearly two hours discussing whether to implement both a 0.25 transportation infrastructure tax and a 0.20 percent tax for transit expenses. S.B. 136, a measure signed into law in March, allows county governments to levy the local option sales taxes without voter approval.
The five elected officials ultimately agreed the ability to generate additional revenue outweighed the impact the increases would have on residents. It would also notably allow the county to leverage those funds for more money through federal grant programs.
"It is always hard to raise taxes," County Council Chair Kim Carson said. "But, personally, I have to look at how we can best leverage our constituents' dollars, and I feel that is exactly what we are able to do with these."
The current base sales tax rate is 8.45 percent within Park City and 6.55 percent in most areas of the county. The Snyderville Basin Transit District has a sales tax rate of 6.85 percent.
Once the two taxes are imposed, the rate will increase to 8.9 percent in Park City, 7 percent in most of the county and 7.3 percent within the Basin Transit District.
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The new taxes do not apply to non-prepared foods, such as groceries, or gasoline. The rates also do not include transient-room or restaurant tax rates because those only apply to short-term rentals or dining out. Tourists pay an estimated 90 percent of the sales taxes in Park City and 50 percent county-wide.
County staffers first presented the local option sales taxes to the County Council for consideration in May. They strongly urged the Council to impose the additional taxes to support the county's transportation goals. Carson said the county initially began exploring the option after the 2018 legislative session.
The county faced a deadline by the end of the month to impose the 0.25 transportation tax. While the County Council could have chosen to levy it at a later date, doing so would have meant passing up the opportunity to earn the sum of the revenue the tax generates before next July.
The tax will not be implemented until Oct. 1. The county will likely begin receiving those revenues after November and will keep 100 percent of the estimated $3.6 million it generates until June 30, 2019.
"For us to maximize the dollars on the (0.25) tax, we felt like it was worthwhile to try and do it as soon as possible," Carson said.
Beginning on July 1, 2019, the county will split the revenue with the municipalities, with Park City taking the largest chunk. It is expected to cost the average resident about $35 to $45 annually, with that number varying depending on individual spending habits.
The 0.20 percent tax for transit capital expenses will not be imposed until July of 2019. However, Council members said imposing the tax now allows the county to apply for federal grants.
Some of the projects that will be supported through the two taxes include: an extension of the Electric Express, a Silver Creek to Bitner Road connection, a widening of Chalk Creek road and new bus routes to Pinebrook and Summit Park.
Before Wednesday's vote, several residents sent the County Council letters offering their support or explaining their opposition to the increases, with many of the respondents residing in the eastern end of the county. Some questioned what the return would be for East Side residents.
Former County Councilor and member of the Kamas Valley Business Association Tal Adair said the east end of the county is growing and the roads may not be sufficient to handle some of the pressures. But, he asked whether a significant amount of the revenue would go to the Snyderville Basin and Park City.
"If I go to Park City and spend $500, what portion of that comes back to my municipality?" he said on Wednesday. "Personally, I don't like taxes. They take money out of my pocket and my family's pocket."
Other letters and community feedback cited a general feeling of "tax fatigue" as another reason to oppose the increases. The Council approved a 5.5 to 7 percent hike for the average property tax bill in 2017, while voters also agreed to pay an additional 0.50 percent on normal purchases in 2016 to fund similar transportation projects.
Council members attended a Park City Council meeting on Tuesday, and support was split among Park City's elected officials because of other recent tax increases.
"I think they all understood they could use the revenue, but they were concerned with the timing," Carson said. "They already did a transient-room tax increase and are looking at passing another bond. Some of their taxpayers have reached that point of fatigue."
County Council members were very concerned with whether some of the larger counties in Utah were participating, a factor that would affect how much money the county ultimately receives. Salt Lake County recently announced it would implement the tax if city councils within the county supported it. The county appears ready to move forward with the tax, according to a Summit County staff report.
County Council member Doug Clyde said he is not expecting an adverse reaction from the public, adding that it is a "relatively small tax." But, he said, he is also not anticipating praise.
"While we are all concerned about the cumulative nature of taxes, this is a relatively small tax that doesn't not apply to food," he said. "While there are negative implications for taxes to our tourists and businesses, and for those with fixed and lower incomes, it is very small for the average individual."
The County Council may rescind either tax at any time.