Salt Lake County will continue preparations to hold a special bond election in the first half of 1989, even though action by state lawmakers could force a change in those plans, County Commission Chairman Mike Stewart said Thursday.

The county wants to ask voters to approve a general obligation bond issue of between $8 million and $10 million - and a corresponding property tax increase needed to repay the bonds - to finance construction of a new minimum security jail.But the 1989 Utah Legislature appears likely to place some form of tax limits on local governments, and those state-imposed limits could affect the county's jail bonding plans.

County officials say they need the new facility for sentenced low-risk prisoners to ease overcrowding at the 550-bed county jail, which because of overcrowding now routinely cites and releases misdemeanor offenders who otherwise would be jailed.

All other alternatives to a new jail have been explored, and the feasible alternatives already are being used, officials insist. The county wants the public to vote on the jail bond issue for two reasons: A voter-approved tax increase is politically more popular than a legislatively approved hike, and a bond issue OK'd by voters is the cheapest way for for the county to borrow money.

The county has little choice but to proceed with its plans for the bond election, despite the possibility that tax-limiting legislation could cause those plans to change, Stewart said.

"If we waited on every rumor or whim before we acted, we wouldn't get much done," he said.

But the threat of state-imposed tax limits on local governments is more than a rumor. Legislative leaders have served notice to officials of all 29 Utah counties that they can expect some kind of tax limits to come out of the 1989 Legislature.

Although Utah voters overwhelmingly rejected three tax limiting initiatives on the statewide ballot in November, several forms of legislative tax limits for local governments have been proposed, including Gov. Norm Bangerter's six-point plan that would freeze property taxes.

Salt Lake County commissioners say any kind of tax limits threaten their plans to bond for the new jail because tax limits undoubtedly will harm the county's AAA bond rating, the highest credit rating given to any public or private entity.

Because of that top credit rating, Salt Lake County can borrow money at the cheapest possible interest rate. Should the credit rating fall, the the county's cost of borrowing money will immediately go up.

Commissioners say any form of state-imposed tax limits on local governments - even limits that exclude voter-approved bonding - could cause concern among New York bond-rating firms, thus harming the county's credit rating and increasing the cost of borrowing money to build a new jail.

If the county's credit rating is harmed by tax-limiting legislation, a voter-approved bond issue may no longer be feasible and the county could be forced to find another, more expensive, way to borrow the needed money.