City's tax increase is bad

In the final analysis, how "cool" a city is considered by creative young singles is far less important than how high that city's tax burden is. That makes the Salt Lake City Council's decision this week to raise taxes for the second time in three weeks most unfortunate.

For owners of a house valued at $175,000, the grand total will be an extra $11.50 a year. That's bad enough, but the real down side is that a business valued at $2 million will have to pay another $230. That may not be a king's ransom, but anyone wondering whether to move downtown or find some location in the suburbs would have to look long and hard at those figures.

Earlier this week, Forbes.com issued a report that evaluated how America's top 40 cities rate in terms of attractive places for singles. Salt Lake City finished a dismal 34th, mainly because of a perception that it lacks nightlife. But when it comes to attracting business, nightlife isn't nearly as important as tax rates.

In many ways, Salt Lake City is in an unenviable position. In a metro area of about 1.5 million residents, it sits as the cultural, political and economic center, and yet its population is less than 200,000. It has to supply basic services, such as police and fire, to thousands of non-residents who come downtown each day. It has to have the equipment on hand to fight fires in skyscrapers. It funds many cultural centers that serve the entire metro area (although the county funds some of these, as well), and its main library serves as an elaborate showcase that also attracts many nonresidents. In addition, a bulk of the state's homeless and jobless come to the city seeking services.

The list goes on. Salt Lake City's tax base isn't that much larger than any other city's along the Wasatch Front, but its demand for services is.

The city thought it had solved its budget problems with a modest tax increase last month. But then the county released revenue figures that showed the city isn't going to get quite as much as it expected, and the pressure was on to raise tax rates even more.

The library director, for one, said she would have to cut services if the city didn't raise taxes again. We have no doubt this is true. But isn't it interesting how city leaders seldom talk about private businesses having to cut their services if their tax burdens climb?

After modest growth in the 1990s, Salt Lake City has begun to lose population again. Cities always walk a tightrope between taxing just enough to cover needed services and not too much to send people packing. This latest tax increase definitely was a step in the wrong direction.