From Deseret News archives:

Initiative 1 may prompt a tax warning

Bond for open space fuels worries about Utah's AAA rating

Published: Tuesday, Oct. 12, 2004 9:50 p.m. MDT
 |  E-MAIL | PRINT | FONT + - 
Financial snags in an open space initiative may prompt Utah's Tax Review Commission to warn voters about the ballot item.

Keith Prescott, commission chairman, said the repercussions of Initiative 1 could run deeper than taxpayers realize. Prescott will air his concerns about the proposed $150 million bond authorization Friday when the commission is expected to discuss how the initiative could affect Utah's tax base and economic future.

Initiative One, sponsored by Utahns for Clean Water, Clean Air & Quality Growth, would pay to improve air and water quality, build parks and preserve open space with a $150 million bond backed by a .05-cent sales tax hike. The increase would mean about $14 more a year for an average Utah family.

"I'm for clean air and open space, who isn't? But nobody looked at this from a tax standpoint," he said. "We will attack the subject vigorously."

While the Tax Review Commission cannot block the initiative, it can present its opinion on the bond in hopes of swaying voters, Prescott said. Mainly, he added, the commission wants to discuss the tax issues so that voters know exactly what they are getting with Initiative 1.

Story continues below
"I'm not saying I want to kill it, I just want people to understand the real policy issues," he said. "When an initiative is passed, you get the whole package. You can't tinker with it later."

One of the main sticking points for Prescott is how the initiative will affect the state's AAA bond rating — the highest possible. The state has a $195 million cushion before it slips from its sterling rating, which allows the state to borrow money at a lower rate.

"If we lose our bond rating, you just watch what will happen to taxes in Utah," he said.

Gov. Olene Walker announced last week that she shares Prescott's concerns about the state's bond rating, as does Mike Jerman of the Utah Taxpayers Association. Jerman said the $150 million bond would mean open season on taxpayers in Utah.

"If taxation by initiative became commonplace in Utah, that would probably hurt our debt rating," he said. "These are horrible ways of doing budgets. If this proposal passes, we'll see special-interest groups trying to dictate government spending."

Amanda Smith, head of Initiative One's sponsor group, disputes the claim that the initiative would affect Utah's rating because it has a steady sales tax revenue source.

"The Taxpayers Association is trying to muddy the waters. But these waters are not muddy. They're very clear," Smith said.

Comments

You can be the first to comment on this story.

previousnext

Latest comments

when: One family works their butts off and earns $20K in a year, Another...

The more I read your posts the more I realize that you post because everyone...

Bronco, Kyle rubber match

Bronco Mendenhall, after living a full life, died. When he got to heaven,...

I think the $3.50 charge is insane. I doubt it costs that much to print...

Is talking about religion taboo?

well your somewhat right if what you want to do is use your religion like a...

Editorial: Cancer screening

If it is so inexpensive for all these tests why don't people pay for them...

The Aggies never do anything even half way good that they don't rank on UU...

What a sad life to be convicted of child abuse and then be murdered in...

Y.'s Hall, U.'s Dale earn accolades

Zoobs have no room to talk about close wins. "one play different for OU...

3A: Juan Diego's last-gasp play

This last play should have been a penalty. The inside receiver was covered up...

Advertisements