The city's share of sales tax revenues has increased 29 percent, thanks to changes in the state's sales tax redistribution formula.
Pleasant Grove budget finance director Kay Driggs received a sales tax revenue check for $162,150 for the fourth quarter of last year. During the same quarter in 1989, the city received $129,950.Sales tax in Utah is collected by the state and then redistributed to cities and counties based on a population-based formula adopted by the Utah Legislature in 1983.
"They (the Legislature) did that because our people shop an awful lot at the mall and support retail business established in other areas and thought it was unfair that we not get some benefit from the sales tax revenue they (other cities) generate," Driggs said.
Implementation of the redistribution formula has been postponed several times since adopted by the Legislature in 1983. A bill passed by the Legislature in 1985 allowed the program to be phased in over a five-year period beginning Jan. 1, 1990.
The formula currently divides sales tax revenue on a 35/65 split, with 35 percent of the revenue distributed based on population and 65 percent of the revenue being returned to the area where it was collected. In July, the formula will be change to a 40/60 split. Beginning July 1, 1993, sales tax revenues will be divided on a 50/ 50 basis.
While Pleasant Grove is happy to be receiving more sales tax revenue, it's about what the city expected it would receive when it put together its budget last summer. The increased revenues will do little to ease a budget pinch caused by falling property tax revenues.
"This keeps us right in line with the way we projected it when we did our budget last summer as far as sales tax revenues," Driggs said.