The Utah State Tax Reform Task Force began their listening tour this week with a stop in Northern Utah. The purpose of these meetings is to gather input as lawmakers decide the best way to amend what they are calling an outdated state tax structure.
“It is wonderful to see our legislative leaders getting out and around the state,” said North Logan Mayor Damon Cann. “I can’t remember the last time that they have had a major public outreach on this level, and I think it speaks to their efforts to do their very best to take public input into account and to make sure that whatever tax reform may take place is carefully thought out and is wisely done.”
Cann was one of many community members and stakeholders who attended the public meeting in Brigham City on Tuesday evening and spoke during the public comment period.
In addition to being a mayor, Cann is also a board member for the Utah League of Cities and Towns, an organization focused on supporting and advocating for local government entities.
Because of this, Cann said his biggest concern when it comes to tax reform is making sure that the policy doesn’t negatively impact the ability of city and town governments to provide the services their residents need.
During the meeting, members of the task force stressed that their goal in tax reform is to come up with a revenue-neutral solution. However, Cann said revenue-neutral policy on a state level will look different from revenue-neutral policy on a local level.
“What is revenue-neutral in a statewide context will not be revenue neutral in the 248 tax bases that are our cities and towns across the state of Utah,” Cann said.
Depending on what solution is agreed to, Cann said some communities could end up overfunded, where others may not have all of the resources they need.
“Our ability to do the things that the legislature wants us to do and that our citizens want us to do hinges on our ability to raise the revenue to do so, especially through the sales tax,” Cann said.
Logan Mayor Holly Daines also attended Tuesday’s meeting and said she is grateful state leaders are making the effort to listen to community members and leaders across the state. She said she understands why the changes are needed and is supportive of the concept.
Like Cann, she wants to make sure that any changes made allow Logan to continue gathering sufficient revenue through sales tax, which she said is the city’s largest revenue source.
Right now, local municipalities like Logan and North Logan are able to collect 1 percent of sales tax through the local sales tax option. Fifty percent of those funds stay in the municipality and the other half goes into a fund that is redistributed across the state based on the population of communities.
Under this arrangement, Daines said Logan is able to meet the needs of both its residents and the residents from smaller communities that rely on the resources Logan provides as a regional center. She wants to make sure Logan can continue to do this, no matter what tax reform policies are passed.
Rep. Val Potter, who formerly served as the mayor of North Logan, said it is important to him to make sure local municipalities are not negatively impacted if new tax policies are adopted.
However, he said the other side of the issue is making sure there is enough money in the state’s general fund to provide city and county governments funds for building roads.
“If we don’t take care of this issue in the general fund, then that fund that replaces and repairs roads in the cities will be directly affected,” Potter said. “That, I think, will put everything else to shame. Every city will be more concerned about the loss of revenue for the transportation funds.”
Potter said it is also important to note that state money is not the only source of revenue for cities and counties.
“They have fees. They have their own taxes. They have revenues coming from a number of sources. One of those is the state,” Potter said.
Potter said he is aware that a state tax policy that placed new burdens on municipalities could lead to increased fees for residents, but he thinks if lawmakers work with the Utah Association of Counties and The League of Cities and Towns that this can be largely avoided.
“I think in the end it is going to be a positive thing for the communities as well,” Potter said.
Other concerns brought up during the public comment portion of Tuesday’s meeting included ensuring that education was properly funded and that the tax burdens placed on individual citizens were not increased. Many people also advocated for services to remain tax-free.
To learn more about why lawmakers are proposing tax reform and to contribute to the public comment, visit strongerfuture.utah.gov. Dates of other meetings across the state can be found there as well.