Few city councils in Utah County are willing to pass resolutions telling residents how to vote on the food-tax initiative - only Orem and Payson city councils have done so.
Orem Councilman Norman Woodhouse voiced the opinion of most council members when he said during a public hearing Oct. 9, "I think it is necessary to let the people know how we feel."Orem would lose $557,000 annually if the food-tax initiative passes. Ten residents attended Orem's hearing, and all were in favor of removing the food tax.
The Payson City Council passed a resolution Oct. 3 opposing the initiative. The city would lose $100,000 from its general fund budget total of $2.6 million.
Most city council members have stated it isn't their business to tell residents how to vote. But that hasn't kept them from holding public hearings to discuss options for making up revenue or cutting services if the initiative passes. During these hearings there's been a lot of emphasis on the lean, tight budgets cities are operating on.
And while they haven't passed resolutions opposed to the initiative, most of the councils expressed opposition to it.
The American Fork City Council, for example, told residents at a public hearing last week that if the initiative passes, the city will lose between $191,000 and $250,000. The Pleasant Grove City Council pegged its loss at $95,594.
"On the surface, that may not seem too bad," Pleasant Grove Mayor David Holdaway said. The loss amounts to a 6.2 percent decrease in general fund revenues; however, because the city would not decrease some general fund budgets, such as police and fire, the resulting decrease in other budgets would be much higher - about 20 percent.
Pleasant Grove's budget is very lean - the city has one of the lowest per-capita costs of government in the county at $160 per person, according to Holdaway.
"It would be difficult to operate on that much less," Holdaway said.
A report prepared by the Utah State Tax Commission and three other state offices indicates that for the 41 largest cities in Utah, revenue from sales tax on food ranges from 2.2 percent (South Salt Lake) to 25.1 (Beaver) of total revenues.
Most cities believe they have four options should the initiative pass: cut services, increase the sales tax on non-food items, raise property taxes or increase franchise taxes.
Provo's property tax, for instance, would have to be increased 21 percent to make up for an anticipated $750,000 loss in revenues. A 21 percent property tax increase amounts to $33.75 per year on a $75,000 home, according to Budget Officer Keith Haslem.
In Pleasant Grove, revenue could be made up - and then some - by doubling the 3 percent utility franchise tax, an increase of about $30 per home per year. American Fork Budget Officer Carl Wanlass said his city could be covered by increasing the property tax 5.5 mills - a hike of about $50 per year on an $80,000 home. American Fork could also raise part of the loss - $90,000 - by increasing the 5 percent franchise tax by 1 percent.
Families living in homes or apartments aren't the only people affected by property and franchise tax increases; so are businesses and industries.
The average savings per family that would accrue if the sales tax were removed is substantially higher than the projected tax hikes necessary to make up the revenue loss.
According to the State Tax Commission report, a four-member family with an average income of $20,000 to $40,000 would save up to $252 annually if the tax were eliminated.
As one Pleasant Grove resident pointed out during a public hearing in her city, the money available to families could be recirculated to cities in other ways - taking the family swimming at the municipal pool more often, for instance.
But franchise fees and property taxes are selective, some city council members argue. Not all residents have homes; such taxes affect only property owners. A food sales tax is fair because everyone who eats pays it, according to some elected officials.
"If we lose the sales tax in American Fork, it looks to me like we as property owners are the ones that are going to be hit. Renters are not.
Tourists are not," said Jerry Larson, American Fork council member.
In addition, sales taxes aren't charged on food-stamp purchases, so the really poor aren't helped by eliminating the tax, Larson said.
Food tax tally
What the cities say about the food-tax initiative*:
Alpine: The Alpine City Council has not publicly discussed the initiative.
American Fork: Council opposed. Revenue loss: $191,000 to $250,000 of general fund revenues of $3.5 million.
Lehi: Council opposed. Revenue loss: about $63,000 of general fund revenues of $2.3 million.
Lindon: Council opposed. Revenue loss: $22,000 of general fund revenues of $900,000.
Mapleton: Hasn't not made official statement pro or con. Revenue loss: $13,000 of general fund revenues of $550,000 Orem: Council passed resolution opposing. Revenue loss: $557,000 of general fund revenues of $15.4 million.
Provo: Council opposed. Revenue loss: $750,000 of general fund budget revenues of $19 million.
Pleasant Grove: Council opposed. Revenue loss: $95,594 of general fund revenues of $1.5 million.
Spanish Fork: Council opposed. Revenue loss: More than $100,000 of general fund revenues of $2.9 million.
Springville: Hasn't expressed opinion. Revenue loss: $107,000 of general fund revenues of $3.2 million.