A new law governing the process of relocating the Utah State Prison contains a provision that would allow Salt Lake City to raise its sales tax rate if it is chosen as the site of a new prison. The decision to combine municipal tax policy with the relocation effort is bothersome on a number of fronts. First, it smacks of backroom dealing that denies sufficient input from citizens and other stakeholders. Second, it speaks to a level of desperation in finding a prison site that won’t meet with resistance and protest.
Finally, it suggests the actual costs of relocation may be greater than what the prison relocation committee and its legislative overseers have suggested, depending on what other offers may be extended to other site candidates to make relocation more palatable.
In the big picture, a city’s tax policy should not be contingent upon the success of a separate policy initiative, period.
Salt Lake City Mayor Ralph Becker has maintained that the prospect of a sales tax enhancement — which the city has long coveted — won’t lessen his opposition to building a new prison on one of two potential sites in the city. That response is somewhat disingenuous in that it implies support for the tax provision, which is really no more than a legislative charade intended to lessen a city’s opposition to hosting a new prison. As a matter of principle, we would rather see outright condemnation by the mayor’s office of any kind of quid-pro-quo arrangement — whether made in writing or by a wink and a nod — that would tie a city’s future revenue to the fate of a new prison.
The mayor’s opponents in his upcoming re-election bid have seized on the issue as political fodder, and they make a valid point. Should the situation play out, city residents would get a prison they don’t want, and in the bargain, end up paying higher taxes for consumer goods and services.
The city’s interest in raising its sales tax is predicated on a real municipal problem. Its population swells during workdays by commuters who enjoy city services for which they are not taxed. Making them pay a slightly higher sales tax is arguably a fair way to offset those costs. But it would be patently unfair to city residents who already pay taxes in support of those services and who would simply be seeing a tax increase that would result in no added value to them in the form of more or better services.
And what about businesses that might experience a loss in traffic as residents travel outside the municipal boundaries to buy goods and services at a lesser tax rate? A half-percent increase — as the legislation in HB454 authorizes — may not end up being a big deterrent to business patronage, but it certainly won’t lead to growth in anybody’s customer base.
The city does have a legitimate interest in finding ways to equitably charge the users of city services whether they are residents or not, and a sales tax adjustment may be one way to do that. But whether it’s the best way has absolutely nothing to do with whether Salt Lake City is the best place for a new prison.