County Quarter-Cent Sales Tax

On December 18th the Utah County Commissioners will vote on whether to impose a ¼-cent sales tax countywide that would be used to fund transportation infrastructure and operations. They are asking for feedback from the City Councils in Utah County so we will hold a special electronic session on Monday for our Council to consider and vote on a resolution. As such, I wanted to take a few minutes to explain what this is and provide residents with the opportunity to weigh in.

In 2018, the State Legislature passed Senate Bill 136, which among many other things included the following:

  • Changed the board of UTA from a 16-member board to a 3-member commission with one representative from Weber/Davis counties, one from Salt Lake County, and one from Utah/Tooele counties. There is also a 9-member advisory board that is to work with the new commission.
  • Allows for counties to enact a quarter-cent sales tax (1 penny for every $4 spent in the county) to fund transportation needs. However, time limits for enacting the tax were set.

In the bill, three options were provided.

Option 1

If a county enacted the quarter-cent sales tax before June 30, 2019, the county could keep all the funds collected during the first year to pay down debt service or fund regionally significant transportation projects. After July 1, 2019, the funds collected from the tax are split with 40% going to cities, 40% going to transit, and 20% going to the county.

Option 2

If a county does not enact the quarter-cent sales tax before June 30, 2020, then cities have the option to enact the tax. The distribution of funds would be 50% to the city and 50% to transit, with nothing going to the county. If the county decided to enact the tax after June 30, 2020, it would only apply to those cities that had not already implemented the tax and unincorporated parts of the county.

Option 3

If the tax is not implemented by June 30, 2022, by a county or city, it can no longer be enacted.

As of today, Davis and Weber County approved this tax through a vote of their residents in 2015. Salt Lake County approved the tax a few months ago. Utah County leaders have discussed but not yet voted on this. Currently, one commissioner has stated he wants to wait and put it on the ballot in November 2019, one has expressed support for enacting it now, and one is asking for cities to weigh in.

This is a difficult position for city and county officials to be in. Voters in Utah County rejected Proposition 1 in 2015. At the same time, Utah County and cities are struggling to keep up with road infrastructure and maintenance needs, as evidenced by several cities implementing road fees, and the quarter-cent sales tax would generate some much-needed revenue for those projects. Here are the considerations for and against that I have discussed with others throughout the county.

Considerations For:

  1. Utah County is growing rapidly. We currently have approximately 600,000 residents but are projected to have 1.6 million residents by 2065 and surpass Salt Lake County at some point. Studies indicate approximately 65% of that growth is internal, meaning our children and grandchildren are choosing to stay and have families in Utah County. We must start planning and preparing for that growth. That includes new roads, new freeway systems, and alternate forms of transportation as we can’t build enough roads to handle that kind of congestion, especially with the geographical challenges we face.
  2. Utah County and cities are struggling to keep up with transportation infrastructure as revenues from gas taxes have decreased with more fuel-efficient vehicles and electric vehicles. Some cities, such as Provo, Highland, and Pleasant Grove have enacted monthly road fees to catch up on road projects. The Utah County Public Works Director has indicated that county road projects have been postponed due to lack of funding. The tax would bring in much-needed revenue for roads and transportation projects. The estimates we have received show this tax would bring in $22 million per year for the county, with Cedar Hills receiving $118,435 per year once the 40/40/20 split was in place. If the County did not enact the tax and Cedar Hills chose to do so in 2020, the portion to Cedar Hills would be $148,044. To better explain what this would mean for Cedar Hills, in our current budget we anticipate receiving $435,000 in road fund revenues but expending $695,000 in road projects. This means we must transfer money from the general fund to help make up the difference. 
  3. The Utah County Commissioners and UTA recently agreed to an interlocal agreement on the UTA portion of the tax that would benefit Utah County. The two main points being that UTA is required to use their portion, which is a little over $8 million per year, to pay down the $65 million bond that the county issued for the UVX (otherwise known as BRT) project. After that, UTA must spend the $8 million per year on Utah County transit projects and operations in consultation with the Utah County Council of Governments. Currently, Utah County spends about $6 million per year in bond payments and operation/maintenance costs for the UVX project so this would free up a considerable amount of county money to be used for other transportation needs. As Utah County has been using savings to fund operations and plans to use another $8 million of savings next year to cover current expenditures, this could have a substantial impact on the County budget and their ability to keep more in reserves.
  4. With Salt Lake, Weber, and Davis counties having approved the tax, they are in a better position to fund transportation and transit projects to prepare for growth. If Utah County doesn’t approve it, we will fall behind our neighboring counties along the Wasatch Front and it could be harder to get the UTA Board to approve transit projects in our county as two of the three represent Weber, Davis, and Salt Lake counties and will understandably want to keep those funds in those counties.

Considerations Against:

  1. Utah County residents voted against Proposition 1 in 2015. Now county and city leaders are being asked to enact it to fund needed transportation projects. If cities approve it, some will look at this as local leaders going against what their residents want.
  1. It’s a new tax and nobody likes to pay new taxes, especially as there have been tax and fee increases from other entities, such as school districts, cities, and special service districts.
  1. UTA doesn’t provide service to Cedar Hills. This is less of a concern for me as I look at our needs from a regional perspective and our residents are also dealing with the congestion issues of nearby cities that are rapidly growing, but for some, this is a concern.
  1. UTA has struggled with issues related to transparency and poor fiscal management and has about $2 billion in debt. The hope is that the new 3-member commission and 9-member advisory board will be able to get UTA on a better course, but UTA has a lot to overcome to gain back the trust of many. There are residents in our county who are opposed to giving any more money to UTA, even if it means paying higher taxes and/or fees to cities to fund road needs.

As our City Council will be voting on a resolution regarding the quarter-cent sales tax, I wanted to get this information out so that residents have an opportunity to understand the decision we face and to weigh in. As always, we appreciate your feedback and are happy to answer any questions.

6 thoughts on “County Quarter-Cent Sales Tax

  1. Kent Rust

    Mayor Rees,
    Thank you so much for your explanation of the possible county tax increase. After reading your explanation I think it is best to vote in favor of it. It is a difficult decision but I think we need to continue to improve our roads and the infrastructure.

    Liked by 1 person

    Reply
  2. Susan Johnson

    I would vote yes on a current tax increase to address transportation needs. This is based on the pros & cons you laid out, especially the fact that currently both Cedar Hills & the county are pulling from savings each year to cover transportation related costs. I also recognize the immediate & future need to partner with Salt Lake & Davis Counties to address the transportation needs along Wasatch Front. Not only would I suggest we be a team player to meet immediate needs but would encourage city & country government officials be looking ahead 50 years to progressively & creatively meet the demand internal & external growth will place on our current transportation system.
    A few questions I have:
    1. Why isn’t UTA proving bus service for Cedar Hills & how can we change that?
    2. Why isn’t air quality mentioned in your argument? I’m assuming it’s implied but I’m very concerned that this issue is not in our political & everyday conversations more.
    3. How far forward is the current UTA board looking? I would strongly encourage county commissioners & city governments to be actively engaging with UTA to plan for greater access to public transportation in the next 50 years. Help us all get comfortable with riding buses, trains & trolleys. Look to other cities world-wide who are meeting the pulblic’s practical needs for transportation to & from work, shopping centers, and other commercial centers.

    I appreciate your updates on this and many other issues impacting our beautiful little city & want to say thank you for serving!

    Liked by 1 person

    Reply
    1. Jenney Rees Post author

      Susan,
      On your questions above:

      1. There used to be a bus that came to our city, but I believe it only picked up and dropped off once per day. That is a tough schedule for most to work around, so it was canceled due to lack of ridership. Right now UTA doesn’t have plans to expand into Cedar Hills, but that could change with the growth in the area. One UTA rep I spoke with several months ago even talked about a vanpool or other rideshare program. We’ll continue to have those conversations.

      2. Air quality is a big concern and one that is talked about frequently with regards to public transit. The federal funds used to pay for the free fare with UVX was CMAQ funding, which can only be used for congestion mitigation and air quality. You are right that we need to keep discussing our air quality issues so as to find solutions.

      3. Utah County mayors and commissioners work together through our local MPO, which is Mountainland Association of Governments, to plan for future transportation needs. The current plan goes out to 2040 but we are in the process of updating it through 2050. Long-term planning is the goal as our systems will be more effective and less costly if we prepare for the growth now instead of trying to fix the issues later.

      I hope that answers your questions, but feel free to email me or call me with any others.

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      Reply
  3. David Vanden Brink Sr

    My wife and I have discussed your explanation and believe the best choice is to move forward with the 1/4 cent tax now. Utah County would be a step child with UTA if we are the only county on the outside without the funding.
    As a new Utah resident of only 3 years I am concerned that the course of action taken to get needed revenue for transportation is a regressive sales tax increase. Personally I would rather see this as a property tax, but the die is cut.

    Liked by 1 person

    Reply
  4. Lois Howard

    Thank you for your explanation. Although we may not prefer the rates of growth we’re experiencing in Utah County, it will continue, and it’s short-sighted not to do what we can now to have a better outcome in the future. Robert and I support the tax.

    Liked by 1 person

    Reply

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