Budget crunch fuels talk of a big tax boost in South Salt Lake
The proposed increases come on the heels of new state law that changes how sales taxes are distributed.
The city would have to raise property taxes 25 percent to 400 percent in order to give the pay increase, put capital expenditures back to historical levels and compensate for the loss of $700,000 to $800,000 in sales-tax revenue. That tax increase is on the city's portion of property taxes and would amount to $3 to $50 per month on a $175,000 home.
But city officials Wednesday debated whether residents should pay more taxes. Some officials argued the city could trim the budget in other areas to save money. Councilman Poponatui Sitake questioned the need for proposed budget items such as $35,000 to remodel the council chambers, another $35,000 for the Chamber of Commerce to have an office in City Hall and $48,000 for additional mayor and administration vehicles.
"Raising taxes isn't a way to bring in more money," said Councilman Shane Siwick. "It's a quick fix. I'm convinced we can grow out of this without having to raise taxes."
In order to put all cities on the same distribution scale, the 10 cities will be forced to operate on their 2004-05 sales-tax rate, until they can phase out of the provision. South Salt Lake officials predict it will take them seven years to phase out.
"We've turned to property taxes as the first cure-all for this problem," Siwik said.
However, Councilman Casey Fitts argued the city needs to be proactive about solving the sales-tax loss. Mayor Bob Gray's tentative budget asks for a 25 percent property-tax increase, which would still leave the city approximately $447,000 short because of the sales-tax revenue they will be losing under new law.
"This is going to hit our city like a ton of bricks," Fitts said. "Raising property taxes is not a sin. There are times when raising property taxes is what you have to do."
Adding to the problem is that the proposed budget calls for a 7 percent — or $600,000 — wage hike for public-safety personnel. That amount is a far cry from what the city police and fire employees say will bring them up to market level.
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