Increase in sales tax to fund transit?
February 3, 2015
One way to create a detour around Summit County’s current traffic jam could be to raise local sales taxes. Current sales tax rates already include about a third of a cent for transit, but that could double, raising revenues for a variety of traffic mitigation projects, including, potentially light rail.
Last week, Summit County Chief Deputy Attorney Dave Thomas and Public Works Director Derrick Radke provided the County Council with two options for securing funding to pay for future transportation projects.
"This is all part of beginning the discussion about where you can find money for various things," Thomas said.
One option includes implementing a .25 percent mass transit tax increase within the Snyderville Basin, based on the current transit system. If the county were to build a light rail system, it could increase the transit tax to .30 percent. A light rail sales tax within the Snyderville Basin could yield an additional $1.6 million.
Currently within the Snyderville Basin Transit District and the Park City Municipal boundaries, there is already a .30 percent, or about a third of a cent, mass transit tax. The 2015 projection for revenue from the current transit tax is $1.29 million. The transit tax is limited to the Snyderville Basin and the Park City Municipal District boundaries, but through an election could go countywide yielding higher revenues.
Another funding option for transportation is being debated in the Utah Legislature. A 10 cent per gallon increase in the motor fuel tax could give Summit County an additional $457,707, bringing the total projected 2015 gas tax revenues for the county to $1.74 million, according to a staff presentation prepared in anticipation of the meeting.
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"It’s tough enough to put in a tax increase, but to do two?" County Council Chair Kim Carson asked.
"Personally, I’ve been telling the County Council that we are short on the amount that we spend on roads to try and maintain existing levels of service and pavement quality," Radke said. "And these would be relatively minor or easy ways to generate some additional revenues and not all would fall on the backs of the citizens. A large part would fall on other people who come to Summit County.
"We’re just looking for easy ways to pay for transportation improvements," he added.
Kent Cashel, a Park City long-range transit planner, said since transit is currently funded by sales tax, it is an obvious mechanism to explore.
"We know that can provide funding," Cashel said. "But is this a good idea, what could it generate, and what it could be used for, would all have to be figured out.
"We are gong to have to find new sources of funding and I applaud them for starting to look at alternatives," he said.
Park City officials are also exploring long-term financial mechanisms for funding transit and transportation, Cashel said.
"We at the city are in the process of beginning to look at those things, too, and sales and gas taxes are likely candidates," he said. "The city is in support of the efforts on the Hill, but they are conceptual. We’ll have to be able to spend some time educating the public why we are asking for the increases and what the plans are for that revenue.
"Both the city and the county, in order to continue to expand transit if it’s to play a role in the mobility of the community and play a role in traffic mitigation, will have to find new sources of money," Cashel said.
County Councilman Roger Armstrong said the county is heading in the right direction in exploring funding options, but "will need far greater levels of funding" to fix the transportation problem.
While the overall business community may support the current transit system, support of a sales tax increase for the transit system could depend on what services it would provide.
According to Chris Eggleton, General Manager of Newpark Resort and Hotel, the Kimball Junction area could benefit from additional transit funding, as long as it improves the current system.
"Public transportation would be, what I consider, a very valuable and marketable amenity for the transit population," Eggleton said. "If increasing transportation can continue to facilitate a better guest experience, then increasing the sales tax could make sense.
"But it would continue to depend on that .25 percent and what it delivers," Eggleton added. "Is it the same system we have today? Or does it expand services and other things."
The County Council was not asked to make any decisions regarding the options at the council meeting, but will revisit them at a later date.
If the County Council does decide to pursue any of the options, an election would be at least a year away.
"You have to keep in mind once it passes, it’s two years down the road until you are actually collecting on them," County Clerk Kent Jones said.