The Summit County Council has less than two weeks to decide if it will implement a new transit sales tax—with a share of the revenues going to local cities.
The council asked local mayors how they feel, at a Monday meeting of the Council of Governments. (COG)
In general, the mayors had mixed feelings, saying they were apprehensive how citizens would react to a new tax coming their way; on top of the levies that have been recently passed or are being proposed this year.
Council Member Roger Armstrong told the COG group that this year’s legislative session, with Senate Bill 136, provided the option for counties to implement a transit sales tax hike, of .25 percent without a vote of the taxpayers.
In the first year of the tax, the revenues, of up to $3.6 million, can go entirely to the county, the council has to decide to enact the tax by the end of this month. Armstrong said it’s the last thing he wanted on his radar right now, coming soon after they got approval in the 2016 General Election for two new transit sales taxes.
Deputy County Manager Janna Young calculated that the new tax would come to $1 to $3 dollars more per resident per month. It will not place taxes on food.
After the first year, the revenues will be distributed among the counties that have adopted it, based 50 percent on population, and 50 percent on the point of collection.
County officials calculate the allocation going to Summit County cities would range from $2.4 million going to Park City, to $800 going to Henefer.
That would mean approximately $18,000 going to Oakley. Oakley’s Mayor, Wade Woolstenhulme, said you must account for other new taxes the residents might be facing.
Woolstenhulme said in addition to the taxes that they’ve already passed, there’s an education group that’s trying to get that 10 cents tax on gas, and the South Summit school board may raise taxes to pay teachers more. In addition, the South Summit Fire District is seeking a tax increase. All these factors are considerations for Mayor Woolstenhulme.
Figures show that Kamas City would receive around $35,000 in the first year. Mayor Matt McCormick said he can see some factors against the new tax, and some in favor.
Mayor McCormick says “It’s a tax that people have some control over to some degree, if they don’t want to pay it they don’t go buy something, and it’s not items that are necessary to survival. For Kamas this number increase my road budget by almost 30%.”
Mayor McCormick says that amount would be significant. He says the issues he has with the transit sale tax are similar issues raised by Mayor Woolstenhulme. He also mentioned considerations to raise water and sewage rates.
McCormick said his Council recently discussed the new tax. They felt that they don’t want to impose a new tax, but also said it might be okay.
Coalville Mayor Trevor Johnson said his first-blush reaction is that the new levy is terrible timing.
Mayor Johsnson says “We’ve already raised our sewer rates, we’re building a water treatment plant this year, just this last month our water rates went up. We’re right in the middle of trying to distribute and allocate the tax we passed just last year that affected transportation. And it feels like going to the citizens for this ask is a lot.”
The county’s projections say that Coalville would receive $22,000 a year under the formula. Johnson said getting that funding would be awesome, but if he had to, he could figure out how to find that money elsewhere. Mayor Johnson said he doesn’t know if “the juice is worth the squeeze.”
Similar sentiments came from Francis Mayor Byron Ames. The calculations are that his town would get some $13,000 a year.
“$13,000 is a nice hefty chunk of our road budget every year. If you could take out emotion, and the feelings and optics it seems like it’s almost a no-brainer for the benefit of it, where a lot of it is outsourced to the impact of tourists.” Mayor Ames said while weighing in on the issue
“On the flip side of that there’s a lot of things coming down the pipe in Eastern Summit County”
Council Members Armstrong and Glenn Wright said another argument in favor is that if the counties don’t implement the tax, the legislature might decide to do it anyway, and Capitol Hill would control where the tax money goes.
But Park City Mayor Andy Beerman said he doesn’t think the counties really have that ax hanging over their head.
“I don’t think that’s a realistic threat, (The Utah Legislature) have that option and it was overwhelming thrown out immediately. The whole point is to pass the buck to the cities and the counties to levy our taxes.” Mayor Beerman said of the threat “I think there’s good economic reasons to do this, but I think the threat is pretty minor that the legislature would move on this.”
Mayor Beerman said the new levy is appealing, because the county doesn’t’ have a lot of financial resources. His concern is that with June 30th looming, the county doesn’t have a lot of time to reach out to the public. Mayor Beerman mentioned Park City Municipal had a similar situation last year when they increased the CRT tax with just 6-weeks’ notice
“We got clobbered by the business community, they’re still furious with us. Even though we produced all the same things, showing how we’re still competitive the lodging association went nuts, they’re still fuming. I can only imagine when they see this, they’re probably going to take issue with it.”
Another big question for County Council is what other counties will sign onto the new levy. Under the distribution formula, Summit County will be sending revenues out unless some of the major Utah counties join in. County officials said at the COG meeting that they will know by June 22 whether Salt Lake County will be implementing the tax levy.