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Higher Taxes on Ballot - How Will You Vote?

Oct 13, 2015 02:55PM ● Published by Bryan Scott

By Rachel Hall

Politicians will have their hands out again as residents return to the polls this November. Proposition 1 on this year’s ballot asks a simple question: Are you willing to pay more taxes? However the facts about this question seem to be less simple. 

On face value the proposed tax increase associated with Proposition 1 would raise funds to be used for transportation expenses. Residents in most cities have sincere concerns about the condition of their roads and the costs associated with building, repairing and maintaining them. 

To those concerned motorists, this tax increase may look acceptable. After scratching the surface and looking past the face value, voters will see that only 40 percent of the funds will be allocated to the local city, 40 percent of the funds will be given to UTA, and 20 percent of the funds will be given to the specific county where the proposition passes. 

Voters will not have the option to accept the local portion of the proposed tax, without accepting the UTA portion of the tax as well as the county portion of the tax. This means for every 10 million dollars the city receives to spend on roads, the residents of the city have to pay $25 million in additional sales tax.

“I think it’s much more appropriate for each entity to make a case separately for why they need a tax increase and what they are going to do with the money,” West Jordan Councilman Ben Southworth said.

Voters may be in favor of fixing local roads, but not in providing funds to UTA or the county – or vice versa – according to Southworth, who also believes that each entity and lobbyists recognized it’s easier to make a case to pass a tax increase when everything is lumped together.

“The entities may have very legitimate needs, but don’t hold one hostage to another,” Southworth said. “I don’t support the initiative at all and will be voting against it. That’s not an indictment on any of the entities; it’s an indictment on the process.”

Over a dozen counties have decided to put the proposition on the ballot, and nearly all the city officials in Salt Lake County have shown support for the proposition in one way or another. However, Proposition 1 on the November ballot will give voters the opportunity to choose to support or not support the sales tax increase geared towards providing more funding for transportation, including UTA.

The proposed 0.25 percent tax increase was approved to be placed on the ballot after the state legislature passed HB362 that allowed for the proposition to be voted on – this same bill also approved a 5 cent per gallon gas tax to go into effect on Jan. 1, 2016.

If the average family uses 20 gallons of gas per week, the increased cost of fuel next year will take an additional $52 per year out of their budget. Consumers should also prepare for this tax to increase other products; it would make sense that if Smith’s trucks are paying more at the pump, then consumers will be paying more for their groceries. This increase to the gas tax is already approved and will take effect no matter the outcome of Proposition 1.

Proposition 1 affects the county as a whole, so we reached out to some politicians throughout the county. When the Journals asked Cottonwood Heights Mayor Cullimore about the impact the proposition would have on residents in his city, he said, “We are thrilled that we are getting 40 percent. It was a negotiated split. This is how politics is done – it’s compromise. What matters is we came to a compromise that everyone agreed upon.”

The split funding would result in families having to pay $2.50 for every $1.00 of city revenue received. 

“I think there are some people concerned about UTA getting some of the funds. 60 percent of the funds are going to cities and counties to take care of local roads. 40 percent is going to UTA, but those [funds] are also going to specifically be going to the bus service in our communities,” Cullimore said. 

However, there is nothing in the bill that would require the UTA to spend the funds in the local city or county.

“We’ve been falling behind for years. Once you fall behind, you can almost never catch up,” Sandy City Mayor Dolan said. “The growth is going to happen. Without this revenue stream, it will become more difficult [to complete projects]. The federal funds have dried up. We can’t expect to see much coming out of Washington.”

Press conferences have been held around the valley to inform voters of the specifics of Proposition 1, but elected officials are only allowed to give a personal opinion on the measure as an individual and not acting as a representative of the public. UTA is also required to offer education to the public and not push for approving or denying the tax increase.

“It’s really not our job to advocate for or against the tax increase. What we do, and what we have been doing, is listening to local elected leaders and civic leaders as they ask questions about how money can be spent to improve transit services in their communities,” UTA Spokesman Remi Barron said. “It’s up to them to tell us what they’re looking for. We try to provide the service after they tell us the kinds of service that they need.”

“We get funding from different sources. We currently do get money through the sales tax. This [proposition] is just an increase. We also get federal funding though federal grants and then some state funding through programs the state has. We also get fare box revenue,” Barron said. “The yearly budget varies from year to year based off of the amount of sales tax collected.”

The needs of each community are unique, and that is why not every mayor has personally spoken up in favor of the tax increase. South Jordan Mayor Alvord will personally be voting against the measure because of the “UTA component” and the “one size fits all nature.”

“This is a pedal to the medal spending approach for transportation. In other words, every city has to spend more on their transportation spending regardless of their history of spending,” Alvord told the City Journals. “The problem with that is that if there are cities in the county that have had adequate transportation spending; they cannot reduce their spending with this new revenue. They have to find creative places to put the money.”

South Jordan has implemented priority based budgeting, which requires all of the initiatives and all of the programs of the city to be ranked according to priority.  City staff and the city council both rank projects to set the priority.

“That’s the way we would anticipate funding roads in the future. If we need to place a higher priority on maintenance, for example, we could simply give that a higher score and fund maintenance,” Alvord said. “We would have to live within a budget more carefully [if Proposition 1 does not pass].”

“Until the streets are paved in gold, we could always spend more. I don’t say that to sound flippant; literally, in Washington D.C. for example, they had granite on their curbing,” Alvord said. “I’m trying to illustrate the point without this money, South Jordan would have to look at our priorities and decide if we wanted to allocate more money to our roads.”

Holladay Mayor Dahle, on the other hand, will individually vote in favor of the tax increase. He feels appropriately funding the needs of the community is the responsible thing to do, and will save money down the road.

“It comes down to being a responsible steward of your assets. It’s irresponsible to let them continue to go downhill when you can maintain them for pennies on the dollar,” Dahle said. “This is a really, really important issue. The citizens can decide if it’s something they think is worth funding.”

Advocacy groups, such as the Utah Taxpayers Association, spoke up suggesting that the potential tax increase should have been placed on next year’s ballot when more voters are likely to offer their opinion during the presidential election.

“I think taxpayers have a lot to think about. As a family, can you afford the increase?”  Utah Taxpayers Association Vice-President Hesterman said. “We have to understand there is a need – this is one way to fill the need.”

Americans for Prosperity State DirectorEvelyn Everton released a statement expressing regret that the potential sales tax has landed on the November ballot.

“We are disappointed to hear that county commissions would even consider allowing a sales tax hike to move forward. As responsible legislators, county officials should be working to protect their constituents from harmful legislation like the ‘local sales tax option.’ If approved, the new tax would increase the price of nearly everything that families need,” Everton wrote.

The sales tax rate would increase to 7.1 percent if approved, compared to the current 6.85 percent in most Salt Lake County areas – equivalent to one cent more for every $4 spent.

 “Even worse? Almost half the funding would go to the wasteful Utah Transit Authority — where it’s common practice to use taxpayer dollars to award massive executive bonuses. Utahns are already adjusting their budgets for the new gas and property tax hikes. Allowing a vote on a bill to hike the sales tax, just wouldn’t be fair,” Everton wrote.

Everton’s remarks obviously illustrate the alleged mismanagement of the UTA in the past. Where administration has been blamed for high spending, low rider base, and gross amount of money being spent on executive bonuses.

The proposition is about more than what it would cost voters now if passed, but what it could cost voters in the future if it does not pass. 

“If we don’t receive the additional revenue – projects will have to wait,” Eyre said. “It costs about one dollar to repair a road and it costs about ten dollars to replace it.”

“There’s a baseline of what you have to spend to maintain transportation,” Dahle said. “It does stop the bleeding from what we have to pull [from the general fund] to maintain the roads [if Proposition 1 passes].

Some politicians have argued that citizens should accept this tax because it is a good compromise; it raises the money that is needed for the roads. It will allow the cities to maintain the roads at a lower cost than replacing them in the future. 

However, when the City Journals reached out to residents, many thought that it sounded like politicians were handcuffing the maintenance of roads to the executive bonuses of the UTA. Many city residents were disgusted to find out that they were not given the option to raise funds for the roads without being forced to raise money for UTA. Many residents showed faith in their local politicians and city staff, but doubted the financial feasibility and management of the UTA.                                                    λ

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