Alta OKs property-tax hike

ALTA — The town of Alta has historically relied on its tourist-driven sales tax to generate revenue, but in the aftermath of a new law that froze sales-tax growth, the town approved an 8 percent property-tax increase Thursday to sustain the budget.

"Basically, with our population as small as it is, that new rule will affect the town of Alta dramatically," said Kate Black, the town clerk. "We rely on tourism, but our base population is so small."

Alta has only 397 residents, many of whom own secondary homes in the skiing hot spot. Daily population during the winter months explodes to as many as 5,000 people. And since the town's budget is based on an industry that relies on the weather, Black said the projected budget revenues are unknown on an annual basis.

Alta Mayor Tom Pollard said with sales-tax growth at zero, "the only area we can gain revenue in is through property taxes."

On a primary residence worth $500,000, the total amount of property tax will be $352 annually. On a secondary residence with the same value, property tax will be $640. The tax increase will bring $257,578 into the city — about $25,000 more than last year's property-tax revenues.

A new state law passed during the 2006 legislative session changes how sales taxes are distributed in a handful of cities that rely heavily on sales-tax revenue. The bill dropped a 1983 "hold-harmless" provision that allowed local governments to receive 0.75 percent of state sales tax. Instead, cities like Alta must conform to the statewide sales-tax formula that gives cities half the sales-tax dollars based on point of sale and half based on population.

To put cities on the same distribution scale, those affected will be forced to operate on their 2004-05 sales-tax rate, until they can phase out of the provision. That means Alta is frozen at only $301,000 for sales tax. The city estimates it will take 11 years to grow out of that cap.

"A good percentage of our budget is based on sales tax. So if we can't budget for a good snow year, which is an increase in our sales tax, we have to figure out how we will balance our budget," Black said.

Alta's situation is also unique because roughly 70 percent to 75 percent of the land within its boundaries belongs to the federal government. And public land like the Albion Basin that is popular for campers, hikers and bikers in the summer must be maintained and patrolled by Alta's public safety.

"This is the first year (under the new law). And depending on what kind of season we have winterwise, it will be interesting to see our budget increases," Black said. "I don't know how this is going to pan out."

Because the tax Alta approved is higher than the county's certified tax rate, a Truth and Taxation hearing that is required by state law will be held on August 8 at 7 p.m. The town's governing body could then decide to change the approved tax rate.

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