Summit County Chief Financial Officer Matt Leavitt gave a dour 2025 budget forecast at the May 1 council meeting.
New legislative mandates, coupled with inflation and the county’s own new programs, are putting pressure on next year’s budget. If the council doesn’t act, that is.
“If we take that approach [of doing nothing], we're probably going to have to go back and cut about $10 million out of the existing budget, which would cause some consternation for some departments,” Leavitt told the council.
$10 million is 12.5% of the county’s roughly $80 million budget for fiscal year 2024, which follows the calendar year.
Doing nothing isn’t a “real option,” he said, because the county is on the hook for maintaining thousands of acres in public lands and new or expanded buildings in the future, among numerous other programs.
Two main taxing options
Leavitt presented two main options for the council to consider: increasing property taxes or levying a new sales tax.
Summit County hasn’t increased property taxes for the two main areas of its budget—the general fund and municipal services fund—since 2017.
That’s despite the COVID-19 pandemic and recommendations from state lawmakers to raise property taxes every five years to keep pace with inflation.
Some taxpayer’s property values have increased dramatically. But because of how property tax is calculated, if one household pays more, another is paying less—the county can't collect more money overall without going through the "Truth in Taxation" process.
The other option is levying a new sales tax.
A new law passed during the 2024 General Session allows counties with a rural hospital, including Summit County, to levy up to a 1% sales tax. Certain items, like groceries, are exempt.
Staff estimate about half of Summit County’s sales taxes are paid by visitors. But unlike property taxes, which have broad uses, sales taxes are frequently restricted in how governments can use them.
The so-called “rural hospital tax” can be used for search and rescue, emergency medical services, waste disposal, police, fire protection and avalanche forecasting. Nearly all of those items are putting pressure on Summit County’s bottom line.
Also new this year is House Bill 84, requiring an armed officer or volunteer guardian in every Utah school. The state isn’t covering those costs, so Leavitt’s projected $10 million shortfall includes $3 million to pay for new security staff.
Lobbying for new options
If the council doesn’t want to raise property taxes or levy a new sales tax, it could ask the state legislature for more leeway on how it uses the tax on hotel room bookings.
That would shift the budget burden mostly to tourists, but the county would have to lobby state lawmakers for a new bill. And the council must pass a budget at the end of December, before the 2025 General Session in January.
Leavitt also suggested the council ask the legislature to redistribute more sales tax back to Summit County. Right now, local sales taxes get spread across the state.
“We have a lot of economic activity, but we punt our sales tax revenues that's collected in our area … out to other larger areas, with larger populations,” Leavitt explained.
Another option would be to ask the state legislature for permission to levy the resort communities sales tax. Right now, only cities, towns and the Military Installation Development Authority building Deer Valley’s East Village expansion qualify for the tax.
If the tax were open to counties, Summit County would also need to qualify by having a sufficient number of hotel rooms. It’s likely that the Snyderville Basin qualifies.
“Within that 84098 zip code, we could possibly generate anywhere from $8.6 million to $12.4 million [annually],” Leavitt said.
Starting conversations early
The council wasn’t excited to hear it may have to raise taxes or add new ones. Vice Chair Tonja Hanson said there are already people struggling to pay property taxes, despite Summit County having the second lowest rate in Utah.
“And I really hesitate in lobbying our legislature for anything, because we live in Summit County, Utah,” Hanson said. “I'm concerned about those lobbying efforts and how successful those could be.”
She said, of the options, she favors a new sales tax and was interested in more creative ways to fund one-time costs, like the new landfill cell at Three Mile Canyon, including bonding.
Leavitt spoke to the council about the budget early this year because of the potential size of the shortfall. Decisions won’t be made until budget deliberations begin this fall.
