Sandy mayor predicts cities will need to raise taxes

Jul 18 2013 - 11:44pm

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SALT LAKE CITY -- The mayor of one of the largest cities in the state predicts local governments will have to look at raising property taxes, if they are going to maintain their ability to provide services to residents.

"We're going to have to start raising property taxes. All the cities will have to. We can't make it anymore with what the current revenue streams are," Sandy Mayor Tom Dolan told an economic development task force Thursday in a meeting at the Capitol. He asked state lawmakers to look at incentives to help municipalities and schools.

Dolan said his community has not raised its property tax in his 19 years of service. He said the three-legged tax source available to municipalities of sales taxes, franchise taxes and property taxes has gotten out of balance. He said the income stream generated by property taxes in his community is so small, it only provides enough revenue to fund the fire department.

"In the political environment we're in, property taxes are abhorrent, but people are willing to pay sales tax," Dolan said. Dolan criticized a move by some communities to fund services through impact taxes or through new fees, which he described as a hidden tax.

The mayor also addressed economic development and said under the current setup with redevelopment agencies, little money is actually generated for local government. He said it is also unfair to expect schools to be a partner in offering incentives to bring in business, because tax breaks often result in districts forgoing a portion of the revenue stream a company may generate.

Lincoln Sturtz, director of legislative affairs for the Utah League of Cities and Towns, said local and state officials will have to find new tools to generate revenue.

He also described local RDAs' incentives to business, limiting the tax stream to local school districts, as "a poke in the eye." Sturtz said the last time the state made any change in its tax structure was in 1966, when an increase in the gas tax was approved.

"The current tax structure won't continue to work. The biggest issue we are looking at is everyone wants easy money. When we say that it's sales tax, we're all looking at the same basic revenue tool for the future. There will have to be a shift of mindset," Sturtz said.

Sturtz said community leaders shoulder some of the blame for the current tax situation. He also acknowleges any long-term change in the tax setup will involve changes at the state level, through the Legislature.

"We as cities and towns haven't done a very good job of showing the needs that exist. The dilemma we have is that we have to come to the state Legislature and say, 'Mother, may I?' We recognize we have to come to the Legislature and ask for tools," Sturtz said.

He said talks with some state leaders show a willingness to explore some potential options.

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