Transit bill could hamper rail funding, UTA says

A bill that the Utah Transit Authority said could hurt its ability to gather funds for commuter rail was approved by a legislative committee Monday by a narrow 7-6 vote.

Under HB226, a city could take money that its residents give to a local-option sales tax for transportation and use those dollars to build its own, city-operated transit system. Also, the bill would allow a city that is not part of a transit district to impose a sales-tax hike for bus, rail or highway improvements.

The measure is being sponsored by Rep. John Dougall, R-Highland. He said the bill's intent is to give cities "greater flexibility in meeting transit and transportation needs."

But during debate in the House Revenue and Taxation Committee, UTA attorney Bruce Jones said that the transit agency had concerns that HB226 would take funds that the agency has already bonded against, or plans to bond against, to build commuter rail.

"That would mean the sales-tax revenues would not be available to be redirected, if a city were to decide it wished to do so," Jones said.

He said he plans to work with Dougall to ensure the bill won't impact the construction of commuter rail. Possible modifications could be made to the bill to ensure that a city could only take funds that have not been bonded against, Jones said.

While committee members said they agreed with the intent of Dougall's bill, many voted against the measure because they had questions about UTA's practice of bonding against all the sales-tax dollars it collects. UTA collects sales tax from Weber, Davis, Salt Lake and Utah counties for commuter rail.

All the money from those counties is collectively bonded against, instead of just bonding against the money that UTA collects in Davis County, for instance, to build the Davis County portion of commuter rail.

"In concept, as I first read through this bill, it sounded like a good idea," said Rep. Roger Barrus, R-Centerville. "But some of the things I heard today did raise some questions that I think we should explore."

HB226 now moves to the House floor for debate.

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E-mail: nwarburton@desnews.com