Park City will finalize its budget for the next fiscal year in June. Last year’s budget was $63.5 million. The next budget could range by tens of millions of dollars depending on what the city council decides to do and spend money on.
The process to determine the budget started Thursday with a presentation from the city’s financial staff and questions from staffers to the council about whether they want to raise any of the taxes that fund the budget.
Park City collects money from several sources including property tax, sales tax, and various city fees.
Park City has no record of the last time it raised property taxes, and councilors Max Doilney and Becca Gerber suggested considering a raise in property taxes as a way to reduce the city’s reliance on tourism sales tax revenue.
Recent estimates put annual property tax totals at around $12 million in Park City proper, and annual sales taxes totals just under $7 million.
The city has consistently set sales tax records since last March, when vaccines rolled out. Gerber said the COVID-19 pandemic highlighted the fact that sales tax isn’t always a stable source of income.
“We’re in some turbulent times and we saw our sales taxes really drop quite a bit at the start of COVID when nobody was going out and coming here, and at the same time our property values continue to go through the roof," said Gerber. "We have a largely untapped resource here where 67%, I think, of our homes are second homes and they pay double the property tax that everyone else does so you can have a pretty nominal property tax increase and have it bring some substantial finances to the city and potentially provide some stabilization.”
The rest of the council was not receptive to the idea. Councilor Tana Toly called raising property taxes “really scary” and said it would hurt the city’s low-income residents. Councilor Jeremy Rubell shared those thoughts.
“Hard pass for me, to be honest," he said. "I just think everything is booming, we’re printing tax money. To turn around and raise property tax, we have affordability issues which just makes that harder, to Tana’s point, but also at the top end of that, affordability issues don’t just hit our social equity initiatives, they hit across the board. I think it has a reverse effect. I think the lifestyle is expensive. I’m not going to support that, it’s just more grind for the residents is really what it comes down to.”
Gerber told KPCW she doesn’t share the belief that raising property tax isn’t equitable and contrasted it with a flat sales tax rate that is the same for everyone regardless of income level.
“I very much disagree that it isn’t equitable to have a property tax raise because I think that it is one of the things that actually really does reflect kind of where you’re at in that social economic hierarchy," Gerber said. "When you raise sales tax, you pay the same amount regardless of whether you make $10 million a year or $40,000 a year on some of these items.”
Toly, Rubell and Ryan Dickey all agreed that a property tax raise was not the right path forward, so that option is not on the table this year.
