Salt Lake City has a legitimate case to make when it comes to asking its residents to pay more in taxes. But as it considers upcoming tax hike proposals, it must remember that individual taxpayers, not entities, shoulder the burden of tax increases.
The city, with a population of about 190,000, is the economic, entertainment and business center of a metropolitan area that, when Provo and Ogden are figured in, numbers about 2.5 million people. Its roads get used far more than a city its size without such burdens might expect. Its police must handle crimes on the scale of a much larger city. And the state lately has imposed on it some large projects not of the city’s choosing.
One of those is a new state prison, being built in the city’s northwest quadrant. Three years ago, state lawmakers gave the city the right to raise sales taxes within city limits by .05 percent to make up for some of that burden. Now, the city wants to take advantage of that.
In addition, city leaders would like to issue $87 million in general obligation bonds, which they say would equal about $5 more per year for the average homeowner. Of course, that figure will vary widely in a city that includes a range of high- and low-income neighborhoods.
Voters must approve those bonds this November before the city can issue them.
City leaders say 64 percent of the roads within the city limits are in poor condition or worse. A sales tax hike would collect money from many of the daily visitors who live outside the city and whose vehicles degrade those roads.
We have long urged local governments to pay more attention to the deferred maintenance of important infrastructure.
However, city leaders are a little more vague when it comes to other uses for the money, mentioning the need to hire more police, to increase transit options and to incentivize developers to build more low-income housing, among other things. They promise to be more detailed before Election Day.
Voters in the city will, of course, be the ones to decide whether to impose greater property taxes on themselves. The sales tax hike likely will be approved by the City Council after a public hearing on April 17.
But while the $5 yearly figure for an average homeowner sounds negligible, it’s worth noting that those voters also will face other small-sounding increases on the same ballot.
One will be a non-binding measure state lawmakers put there for approval of a 33 percent increase in gasoline taxes. This ostensibly would free up general fund money now going toward highway maintenance and construction, allowing lawmakers to put it toward public education, instead.
The other might be a repeat of Proposition 1, a measure to raise sales taxes for transit and transportation. That measure failed in Utah and Salt Lake counties in 2015. Lawmakers this year gave those counties the option of either simply imposing a tax hike or putting it back on ballots again this fall.
Other entities, from school districts to local governments, may add their own proposals for small increases on the ballot, as well.20 comments on this story
And don’t forget the federal government, whose recent tax cuts included doing away with exemptions for state taxes paid. As a result, Utah families with three or more children stand to pay much more in income taxes next year.
Simply put, there isn’t a separate group of city, school district, state and federal taxpayers. Each taxpayer pays them all. Each little tax increase adds up to a lot less a person has in his or her wallet to pay for needs or save for the future.
That’s worth considering as cities evaluate their most pressing needs and possible creative ways to fund them. Tax hikes must be a last resort.