Maybe Utah should reconsider plans to charge sales tax on Olympics tickets, says Sen. Orrin Hatch, R-Utah.
After Utah's members of Congress were briefed in detail Monday on the new Olympics budget that was released last week, Hatch says he worries ticket taxes could reduce direct revenues for the Games that he feels are on a tight budget.Utah legislators approved a bill last session adding sales tax to everything sold by the Salt Lake Organizing Committee, from tickets to Olympic T-shirts and other souvenirs.
That bill was opposed by the Salt Lake Organizing Committee. SLOC Chief Executive Officer Frank Joklik said Tuesday collecting sales taxes on tickets could cost the 2002 Winter Games some $10 million in additional revenues.
Hatch made his comments after a delegation meeting with Joklik, who gave a detailed briefing on the organizing committee's new $1.45 billion budget and projected Olympic revenue.
Olympic organizers said they aren't lobbying but do want sales taxes taken off tickets. Joklik said the issue came up during Monday's meeting but said the question of support did not.
Hatch said charging sales taxes on tickets is a problem because ticket prices must be approved by the International Olympic Committee.
"And that has to include any sales tax. You can't add taxes to the top. They come off the top," the senator said.
He said that Olympic organizers say they can still make ends meet if the sales taxes have to be collected on tickets. But Hatch said it "will be an extra pressure for them in what is a tight overall budget."
SLOC Chairman Bob Garff said organizers are "trying to live within our means and our means, as stated in the budget, do not include that $10 million."
But Garff said lawmakers may decide to take another look at the issue. Especially if they decide the Olympics need more money in reserve to protect against any shortfalls.
"The budget is tight," he said. "The state has sufficient revenues to cover (Olympic) expenses . . . That money really should belong to the Olympic committee to increase our cushion."
He said, "We're going to come out OK as a state if the Games are financially solvent and we do a good job running them. This (sales tax on tickets) may be burdening the Games," and problems in running them well would hurt the state's image more than the ticket sales tax would help.
Hatch said they were told that state and local governments should expect about $330 million in revenue. That number is not new - it's from an economic impact analysis done by the state last April.
What the delegation may not have heard is that the same study warned state and local governments will end up spending enough on public services for the Olympics to reduce profits to between $80 million and $140 million.
Even that might not all be available. Some officials have suggested local governments that are hardest-hit by the costs of providing police, trash collections and other services could get help from the state.
And the $330 million figure includes the amount that SLOC agreed to pay for the state's Olympic facilities. That's $59 million, the same amount taxpayers spent to build the bobsled and luge track near Park City and other facilities, plus another $40 million to keep them operating after the Olympics.
Hatch also said the delegation was told that organizers expect to need $171 million in federal aid on top of its $1.45 billion budget. That package is already being discussed with the Clinton administration.
"That's doable," Hatch said - adding that federal agencies are being helpful and are building such funds into their budget plans.
The $171 million amount does not include many millions more expected in federal help for other security and transportation needs.
"Many of the transportation projects are things we had to do anyway," Hatch said.
But Olympic organizers have made additional requests for Olympic-specific work ranging from park-and-ride lots to road widening.
Hatch said exact amounts to be spent on security - and by whom - likely would not be revealed.