It would take a 96 percent property tax increase to maintain West Jordan's current city service levels in light of plunges in sales tax and other revenues expected during the coming year.
Such a hike isn't likely because City Council members don't think residents would stand for the increase, but public sentiment against higher taxes can't change the city's needs, said City Manager Ron Olson. While the increase would move West Jordan up the tax scale compared to other Wasatch Front municipalities, the increase wouldn't be as drastic as it sounds compared to a property owner's overall tax burden, Olson said.The current annual property tax levied by the city on a $67,000 home is $91.33. A hike to $179.09 would be needed to maintain current service levels for police and fire protection, road maintenance, parks and other municipal services.
Even the most meager general fund budget scenario developed by city staff, which cuts city services to match anticipated revenues, would include a shortfall that would have to be made up through loans and transfers from other city funds into the city's general fund. That option has been all but ruled out and received no support from a budget advisory committee made up of city residents.
The city is also strongly considering dropping its retail license fee, nicknamed the West Jordan sales tax. The city now collects one-half cent for every dollar businesses bring in. To offset the loss of about $500,000 annually in retail license fees, the city may implement a 6 percent franchise tax on all utilities except those provided by the city.
Residents on the budget committee recommended, in general, that services be kept at a level that would require both the hefty tax increase and the franchise tax, if the retail license fee were dropped.
"I heard people say that's what they wanted," said Councilwoman Kristin Lambert, "But I don't think we can pass a 6 percent franchise tax and double property taxes all in one year."
Councilman Dave Plouzek would like to get rid of the retail license fee, but said he could not support both a tax increase and the implementation of a franchise tax. "Right now I favor the franchise tax (over the property tax)."
Councilman Paul Henderson said, in general terms, he could support a budget formula that included both taxes. Councilman Harv Cahoon was not at the meeting.
The budget option discussed by the council Tuesday would have dedicated the franchise tax to capital projects. Mayor Bob Roberts said he doesn't know at this point what the best middle ground is, but thinks it might be possible to refine the list of proposed capital projects, cut the retail license fee and look at a tax increase and franchise tax to offset losses in the other revenues.
One issue the council agreed on is that many other budget questions have to be addressed before the council is ready to vote on a tentative budget that would be discussed at a public hearing, and the end result may be a combination of the two options.
A special budget work session has been scheduled May 28 before a tentative budget is considered May 3.