A 1 percent maximum county-option tax on restaurant meals proposed to fund Salt Palace renovation is drawing opposition from the Utah Restaurant Association.
The new taxing proposal came during a breakfast Tuesday hosted by the Salt Lake Area Chamber of Commerce for legislators and legislators-elect of Salt Lake and Tooele counties. The legislators are expected to face heavy lobbying pressure in January for $15 million - the state's share of $60 million expansion of the Salt Palace.Ron Morgan, president of the Utah Restaurant Association, said his group will "strongly oppose" any tax of this type by the counties.
The tax is being proposed by the Salt Palace Modernization Committee to help fund convention, cultural, recreation and tourist-related facilities. The beauty of this proposal, said attorney Anthony L. Rampton, vice chairman of the Government Affairs Council of the chamber, is it taxes an industry that benefits from this type of activity and raises money from one of Utah's principal industries - tourism.
Morgan said the restaurant association's board of directors met Monday night to discuss other methods for raising the money to remodel the Salt Palace, provide operation and maintenance money and also return more than $8 million to the state for tourism development.
His group will meet Tuesday night with the Utah Hotel Motel Association to discuss the ideas. He declined to be specific until that meeting is held.
Rampton said all of Utah's counties are "crying out" for this type of investment money to boost their recreation and tourism potential. The proposed legislation would allow each county to impose a maximum of 1 percent tax on restaurant meals, with each county choosing to impose no tax or anything up to 1 percent.
Of course, Salt Lake County would benefit the most from the tax because the most meals are sold there. Rampton said that based upon 1989 figures, there were $423.9 million in meals sold in the county and the proposed new tax would bring in $4.2 million.
The State Tax Commission figures show there were $805 million in meals sold in Utah in 1989, which could mean $8 million for the counties to spend if the proposal is adopted.
Rampton said Salt Lake County's share could be used for operation and maintenance of the Salt Palace, retire existing debt caused by the 1983 Salt Palace expansion and build a capital reserve fund that could be used to keep the Salt Palace continually updated.
In addition to the proposed eating tax, Rampton said the Salt Palace Modernization Committee also will ask the Legislature for $15 million to match $15 million each from Salt Lake City and County to remodel the Salt Palace so the Salt Lake Convention and Visitors Bureau can attract the largest conventions in the country.
Truman Clawson, chairman of the modernization committee, said that during the 1990 legislative session an attempt was made to get the $15 million appropriation, but the deal fell through in the waning hours of the session. Even if the appropriation is forthcoming, the county will need operation and maintenance money and the restaurant tax will provide it.
Rick Davis, president of the convention and visitors bureau, said Salt Palace expansion and remodeling is a necessity if Salt Lake City wants to attracts the largest conventions. He said that is recent months the Salt Palace has lost 34 conventions worth $60 million to the local economy because they outgrew the present convention facilities.
In 1983, when the Salt Palace was expanded, it ranked sixth in the West in square-footage for conventions, but since then many cities have or are building new facilities and Salt Lake City slipped to 13th place. Without an expansion, convention spending will decline from $58.6 million in 1989 to $38 million in 1997, but the expansion could increase that to $178.3 million in 1997, Davis said.