Government fiscal policy on the national, state and local levels has become a major topic of discussion over the past four years. The means by which government allocates its resources is a question that concerns every citizen. Bailouts have been questioned, stimulus programs have received scrutiny, and the federal deficit continues to mount.
Financial responsibility is a significant principle in Utah. Its importance is shown by state law mandating that municipal governments, all cities and towns, have a balanced budget. Title 10, Chapter 6, Section 110 of the Utah Municipal Code reads “Budget — Contents — Total of revenues to equal expenditures.”
It goes on to say in Section 117 of the same title and chapter that, “The governing body of any city may not make any appropriation in the final budget of any fund in excess of the estimated expendable revenue for the budget period of the fund.”
Municipal governments generally either hire or contract with a financial manager, depending on the size of the city. One of the primary functions of this director, or economic administrative team, is to assure compliance with the applicable municipal code sections.
This group is also responsible for guaranteeing compliance with all federal, state and local laws related to the funds of the city. The finance department spends a substantial amount of time monitoring and analyzing the revenues and expenditures of the government.
Local officials must be cautious to avoid runaway spending that can bankrupt a city. At the same time they should be practical in providing the essential services their residents rely on.
The tax rate becomes another issue, with a rate that’s too high negatively affecting business.
Some might think that a monetary incentive to recruit business proves to be an enticing lure. However, lower tax rates have proven to be the best motivation a city can offer businesses to locate within its borders.
It is noteworthy to point out that corporations scrutinize long-term recurring costs of taxes when considering communities.
Everything considered, low tax rates are beneficial to both the citizen and business.
Prior to adding any type of municipal support, it is crucial that government consider the true cost of that service to be shouldered by taxpayers and its ultimate worth.
Steve Curtis has worked as a business consultant and communication specialist. He is currently mayor of Layton. He can be reached at email@example.com