The Orem City Council is worried Utahns are going to make a costly mistake.
Council members Tuesday discussed how the proposed tax-limitation initiatives could cripple towns like Orem if they pass."Service levels would decrease drastically, and some temporary employees would have to be cut. We would have fewer people offering fewer services in a less adequate way," said City Manager Daryl Berlin.
Phil Goodrich, director of Orem's administrative services, explained that one initiative, if passed as written, would limit residential property taxes to 0.75 percent of the market value of a home. Other property taxes would be limited to 1 percent of market value. Another proposed initiatve would roll back tax increases passed by the 1987 Legislature.
The measures would place limitations on state appropriations and revenue to be collected and upon the taxing authority of local government. Imposing new taxes or raising existing (non-property) taxes would require a supporting vote by Utah residents.
Goodrich said the initiatives could cost Orem $193,000 in tax revenues.
"But we don't believe that's what will happen. We believe it could be much worse."
A decrease in tax revenues would hit Utah's educational system hard, but Goodrich said officials believe the Legislature wouldn't let schools "take the hits the initiatives would impose." He thinks the Legislature will shift whatever financial burden it can from schools to cities.
Goodrich said, under various scenarios, he could see the initiatives costing Orem as much as $2.3 million.
"The argument for the initiatives seems to be running on emotion, not solid information," he said. "The people who are behind the initiatives have not given any real consideration to the impact it would have.
"The people who developed this do not feel it is their job to determine where that much money could come from," Berlin said. "They think that's the Legislature's job."
Council members discussed the possibility of increasing franchise taxes as much as possible before the initiatives could pass in order to raise funds for the city. They also talked about charging "fees," not taxes, to support city services, but feared the legality of such actions might be challenged in court.
"This is one of the first instances where individual citizens will be asked to make a decision - with long, long, long-term effects - without really understanding what is going on," Berlin said.
Council members agreed that they should consider ways to get fair, balanced information to the public on the effects of the initiatives. If voters still choose to pass them, Orem officials would just have to wait and see what happens, they said.
"Utahns would have to face the consequences of that decision. I suspect at some point the initiatives would be repealed," Mayor Blaine Willes said.
"The people need to understand the issue to make an intelligent decision. And it is my personal opinion that a lot of rational folks would not vote for this if they really understood it."
Goodrich said a poll taken two weeks ago showed 56 percent support for the initiatives. Much of the support came from senior citizens on fixed incomes, he said.
A debate on the proposed tax initiatives will be at 7:30 p.m. Wednesday at the Utah County building. The public is invited to attend and ask questions.