Several factors to be considered with potential county tax hikes
May 16, 2018
One way Summit County is considering accelerating its goal of reducing traffic congestion and providing alternative modes of transportation is by imposing additional sales taxes to fund transportation projects.
"We have been discussing transportation in quite a lot of detail in the last three years, and we know there are desires to expand routes and increase frequencies," said Tom Fisher, Summit County manager. "But, we don't have the dollars or revenue coming in to support the demand of all of these things that are part of the future picture of managing congestion and responding to the growth we have seen."
Summit County staffers provided the County Council with two options last week to secure more funding through the imposition of additional sales taxes. Utah Gov. Gary Herbert signed S.B. 136 in March, allowing the county to explore the new tax options. The bill made modifications to local option sales taxes for transportation and authorized a new sales tax for transit.
"Taxes of any kind are always hard," said Roger Armstrong, County Council member. "But, I think the real hard part here is whether the tax is going to be enacted anyways by the state."
County staffers told the County Council the Utah Legislature is compelling counties to consider imposing the new sales taxes. Otherwise, the state may step in to implement the taxes statewide.
"The state is saying you can enact the taxes and take the full revenue in the first year, or if you don't do that, we will implement the taxes at the state level," Armstrong said. "That puts us in a really difficult position. It is a threat that is somewhat uncertain, but what I am hearing is the choice is either we do it or the state will. I think residents would look at that and say it is a no-brainer."
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The County Council considered implementing similar taxes in the past, but opted against it because most of the money would have been distributed to other counties, Armstrong said. He added, "I want to see how this shakes out and what other counties are going to participate before making a decision."
"If you have Salt Lake and Davis and the larger counties participating then it is less of a concern," he said. "The benefit is substantially greater to Summit County as long as we aren't one of the largest counties participating."
Armstrong said support from the county's business partners and municipalities, including Park City, would help justify an increase.
"We want to have discussions with the leaderships to see how they feel about this and what the benefit is and go from there," he said.
Caroline Rodriguez, Summit County's regional transportation planning director, said she is in favor of implementing a tax hike to help fund critical transit and infrastructure projects.
"These additional funds would allow us to implement a whole host of changes right away," she said. "It would allow us to serve areas that we don't serve now or are underserved. I am really just swayed by the Legislature's position and how they have presented these taxing mechanisms."
Some of the projects that staff said could be funded through the infrastructure tax are: a Silver Creek to Bitner Road connection; S.R. 224 bus-rapid transit lanes; transit service to Summit Park and Timberline neighborhoods; and service from lower Silver Creek and Silver Summit to the Kimball Junction transit center.
"There is a real likelihood that the state will choose to implement them anyways and we would be subject to them determining what projects to pursue," Rodriguez said. "I'm more about having that local control."
Another point raised during the work session last week was the impact another tax increase would have on the local tax rate. Voters agreed to pay an additional 0.50 percent, or two pennies for every $4 spent, on normal purchases in 2016. Staff has said if the Council chooses to implement the two taxes and no other counties do so, Summit County will have the second highest sales tax rate in the state.
Fisher said the imposition of new taxes could burden other taxing entities, referring to the ballot measure that will be before Park City voters this fall to fund a deal to acquire Treasure or any future school bond issues.
"Even though those are largely property tax based compared to sales taxes, that still burdens primary and secondary homeowners, as well as visitors," he said. "I think those are probably the biggest things to weigh against each other as this is contemplated. Certainly, the Legislature has encouraged counties to put these in place after the session this past year, and we are starting to see and get some information from other counties about how they are going about that and what they are contemplating.
"We will be talking to our city leaders and the public to try and weigh what is the right thing to do for Summit County right now," he added. "But, it is great that they have given us these tools and encouraged counties to do it."
The County Council is scheduled to revisit the matter during the May 30 meeting.
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