From Deseret News archives:

Palace tax district hits barrier

House speaker opposes expansion-fund measure

Published: Friday, April 8, 2005 10:15 a.m. MDT
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But Curtis criticized Salt Lake City and Salt Lake County for not coming up with a feasible plan on their own. In its general session this year, lawmakers passed a bill that would fund the expansion. The bill diverted the city's innkeepers' tax to the expansion. But after city leaders complained, lawmakers passed intent language leaving it up to the city and county to figure out where the city's portion (stated at $10 million to 15 million in the intent language) would come from.

"Ever since the session ended they never said what they were going to do," Curtis said. "The only thing they ever came up with was 'the legislature needs to raise taxes for us' and that's something I don't support."

If no agreement is reached, the money would be diverted from the innkeepers' tax.

The idea of creating a special tax district in the heart of Salt Lake City where sales tax rates would be two- to four-tenths of a percentage higher than everywhere else is "not good tax policy," Curtis said.

Such a district would mean people eating on one side of a street would be paying one tax rate while people eating on the opposite side would be paying another. That scenario is "administratively a nightmare" for the Utah State Tax Commission, Curtis said.

A tax district would also set a bad precedent. When other projects arise, officials would just want to create more special tax districts to fund them, Curtis said.

"The next time there's a major project some one will say how about we just increase the sales tax in this area for this project," he said.

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And if Curtis' stance weren't enough, Salt Palace stress is straining city-county relations. Talks at City Hall between city and county leaders this week were tense and included a shouting match.

"It wasn't pretty," one attendee of the meeting said.

The election of Democratic Mayor Peter Corroon was supposed to improve communication between the county and the city but city leaders have been complaining about a lack of contact.

City leaders maintain the county did a poor job explaining to state lawmakers how the expansion should be paid for and what different governmental agencies were willing to do.

Anderson summed up those feelings Thursday saying "they (county leaders) were going to take the lead. We trusted them and we ended up getting stuck with a $20 million bill."

In a slap to the county, city leaders have even threatened to repeal their innkeeper's tax rather than see it pay for Salt Palace expansion, two sources confirmed.

Despite Curtis' opposition and city-county bickering, Gov. Jon Huntsman Jr. will have the final say about whether the Salt Palace makes it onto the agenda for an expected April 19 special session of the legislature.

"Everything's under consideration" for the special session, Huntsman's spokeswoman Tammy Kikuchi said.

Still, Curtis said he had serious doubts about whether convention center expansion will make the grade.

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