Revenue loss hits Salt Lake County

Published: Wednesday, March 7, 2007 9:30 a.m. MST
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Salt Lake County leaders are beginning to clean up the mess that state lawmakers left for them during the recent legislative session.

The Salt Lake County Council met Tuesday and assessed the damage, which amounts to more than $2.5 million a year in revenue lost because of legislative actions. County leaders are expected to decide how to deal with the revenue loss in the next few weeks.

The biggest problem facing county leaders is how to deal with a $540,000 hit to the recreation portion of the Zoo, Arts and Parks program. That loss was caused by a tax-reform plan that lawmakers approved. The measure takes food sales out of the tax base of the so-called "boutique" sales taxes, which impacts the ZAP funding.

The tax plan couldn't have come at a worse time for the county, as voters in November authorized the county to spend $65 million to build or renovate recreation facilities across the valley. Now, some of those projects might lose funding, although no decisions have yet been made on which ones.

"It isn't good," Councilman Joe Hatch said. "We're going to have to squeeze or cut something out."

Legislators also diverted $35 million of the county's hotel-room tax dollars and gave the money to Real Salt Lake to build a soccer stadium in Sandy, just days after the county refused to give the team the money.

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County leaders had opted to stay out of the stadium-financing game, as Mayor Peter Corroon insisted the move was an "unsafe investment" and a gamble of taxpayer dollars. But the Legislature passed HB38 and diverted a portion of the county's hotel-tax dollars to pay for the suburban stadium.

As part of the stadium deal, the state will also build a parking garage. The county already bonded for $20 million in 2005 to build it. Now that the state has taken over the public financing for the stadium, county leaders are considering putting the $20 million in bond money in the bank to earn interest before they pay off the bond.

Since the state decided to build the parking garage, the county can still collect hotel-room taxes after 2015.

"If they (legislators) were going to inflict pain, that was the kind of pain we thought made sense, and the Legislature jumped at it," Hatch said. "This was,was financially for the county,county better than any deal that was on the table."

The county will also lose approximately $850,000 a year in road funds because of HB383. That bill redistributed the funding formula for county and city roads and essentially takes the $850,000 from Salt Lake County and gives it to smaller cities and counties.

County leaders are still talking to legislators to try to determine what the impact of the bill will be on road funding in Salt Lake County.


E-mail: ldethman@desnews.com

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