Summit County asks Gov. Herbert for permission to use $9M in tax revenue to aid small businesses
The unprecedented steps taken by county officials to limit the spread of the novel coronavirus have effectively stalled the local economy, something officials have said is a secondary concern to saving the lives of citizens.
Last week, before the most drastic restrictions were instituted, Park City and Summit County elected officials said they were taking stock of their respective financial situations and working to come up with options to help businesses through these uncertain times.
The Summit County Council crafted a letter Wednesday asking Gov. Gary Herbert for emergency relief from regulations limiting how county tax revenue can be spent.
“We would like to use those sales taxes for grants and loans to businesses and non-profit entities to aid in the recovery of the impacts from the pandemic,” the letter states. “The sooner that we can use our Hospitality Tax fund balances to assist our small businesses, the more businesses that we can save from closing permanently.”
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While the federal stimulus works its way through Congress and an unprecedented number of workers apply for unemployment benefits, some communities have offered stopgap spending to aid local workers and business owners.
Salt Lake City, for example, announced last week $1 million in emergency, 0% interest loans to small businesses. It was intended as a bridge to federal Small Business Administration loans that are expected to take weeks to deliver.
Council Chair Doug Clyde has said that’s the type of program the county would like to offer but noted Salt Lake City’s budget dwarfs Summit County’s.
In Colorado, where several resort towns have also been shuttered with weeks remaining in the ski season due to the coronavirus, the Vail Town Council announced it was readying $500,000 in economic aid, while Eagle County, Colorado, has announced $1.15 million to respond to the crisis.
The three taxes the County Council referred to as the hospitality taxes have fund balances that collectively approach $9 million, Summit County finance officer Matt Leavitt said.
They come from three sources: the transient-room tax, which is levied on purchases like hotel rooms; the restaurant tax; and the recreation, arts and parks tax.
The $9 million in fund balance does not include the so-called RAP tax, which collected $2 million in 2019. Leavitt indicated the fund balance figures are estimates, and officials did not indicate they would use all of that money in recovery efforts.
The county is limited in how it can spend those taxes, which generally must be used to promote tourism.
The transient-room tax, which took in $11 million in 2019, must be spent on initiatives that “put heads on pillows,” Leavitt has said.
The county and the Park City Chamber/Bureau have an agreement in which the county will retain 30% of the revenue from the tax starting this July and give the other 70% to the Chamber/Bureau. In 2019, the split was 20/80. In the letter, the Council indicated it was working closely with the Chamber/Bureau to coordinate recovery efforts.
Park City Mayor Andy Beerman has said he would like to see the Chamber/Bureau take the lead in this area. Park City Councilor Max Doilney is the city’s representative on an economic resilience task force that has been formed in recent weeks. The committee also includes County Councilor Chris Robinson and representatives from the lodging, restaurant and Main Street business communities.
The County Council did not offer specifics about how it would like to disperse the money if given latitude by the governor beyond noting it would like to redirect it to local businesses and nonprofits.
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A member of the Park City Council said he has seen significant progress in the economic recovery two months after describing June 1 as a key date.