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Show Opposition to elimination of food tax gains statewide momentum uses, the Olympic revenue fund and public transit funds. North Salt Lake has an "ace in the hole," according to Simmons, because the city has not imposed any franchise tax. However, if the initiative passes in November, that could change. Bountiful City Manager Tom Hardy speculated a $400,000 to $500,000 loss of revenue, and indicated in-dicated the same basic options as other officials. "We may have to reduce services ser-vices such as police and fire protection, protec-tion, street maintenance and parks and recreation," he said. "We may have to increase other taxes on nonfood non-food items or remove some of the tax exemptions now being used" Hardy also indicated a possible property tax increase of about one-third. one-third. "Right now the taxes on a $70,000 home run about $80 yearly," year-ly," he said. "The increase would take that to about $ 1 07 a year. ' ' Utah Gov. Norm Bangerter has announced he would not try to increase in-crease taxes to replace the lost revenue. Rather, he would look to cuts in social services, health care, . higher education, corrections, public pub-lic education support and other state government activities to balance the budget. In addition to state and local opposition, op-position, the Utah Taxpayers Association, a voluntary association of Utah business known for its support sup-port of limiting taxation, has an nounced its opposition to the initiative. in-itiative. Association spokesman Howard Stephenson said the initiative would not cut taxes, but merely shift them, and the damage could be devastating dev-astating to economic development and efforts to create more and higher paying jobs. "In the final analysis, Initiative Proposal ' 'A' ' is a cruel hoax which plays on the emotions of those who could be hurt most by its passage," Stephenson said. "If the initiative were a true tax cut, I think our members would have supported it." The Utah League of Cities and Towns, a nonprofit organization which acts as liaison between local and state governments, sent a survey to 228 local municipalities questioning the initiative issue. As of July 12, 100 questionnaires had been returned (43.85 percent), which officials say is a good return on a mail-out survey. Of those responding, 88 percent said the organization should take a position on the initiative, and 89 percent of those indicate opposition to the initiative as the position. Of the alternatives offered on the survey should the initiative pass, 32 percent said there should be a sales tax offset to low income families, 23 percent said sales and use tax exemptions should be eliminated, 1 7 percent said the tax on non-food items should be increased, 16 percent per-cent indicated other alternatives and 12 percent did not mark any alternative alter-native measures. By SCOTT SUMMFJULL BOUNTIFUL--Most Davis County mayors are sympathetic to the ideology of Initiative Proposal "A," which would exempt food from Utah sales tax, but concern over the loss of revenue stifling the ability of city and state entities to provide services has prompted an almost unanimous opposition from local and state officials. Currently, Utahns pay sales tax on all purchases at a rate of 6.5 percent. per-cent. On Nov. 6, voters will decide whether to exempt food from that tax. The measure won a spot on the ballot when an initiative petition with more than 65,000 valid signatures was delivered to the state clerk's office. If it passes, the measure would create an estimated $100 million loss of revenue in the state, and many officials are already talking about ways to make up the lost income in-come rather than how to operate on a reduced budget. Some of the arguments for the exemption include that food is a basic necessity of life and, therefore, should not be taxed. Also, the tax is labeled as regressive because people with lower incomes pay more of their available income on food, thus they pay a higher percentage of their income in sales taxes. Proponents say that eliminating the taxation of food could allow people to better make ends meet, allow for savings, investments and greater personal spending to stimulate the economy. They also argue that state surpluses would offset off-set the revenue loss, making tax increases in-creases or service cuts unnecessary. And, the savings could make the difference between an adequate and a poor diet for lower income families. Opponents, however, list arguments that the measure would merely shift taxation to other areas, or new taxes would have to be created to make up the difference. Surplus state money is a one-time solution and cannot be counted on in future years to offset the revenue loss, they say. It is also argued that any tax cut should be in areas that will attract business into the state. There are also arguments that low income families wouldn't get the benefits some claim because low income families are already exempt ex-empt from sales taxes on all food stamp purchases. Also, opponents say sales tax paid on food purchases is the only tax paid by some people, and the loss of revenue would seriously seri-ously hurt essential services. The Utah Foundation, a private tax research organization, reports the savings to the average family would be approximately $200 per year. However, officials stress the savings would ultimately be lost to higher taxation in other areas, or in severe cuts to vital services. Projections indicate Centerville will be the second most impacted city in the state (Moab is ranked number one), with an estimated loss of $200,000 in revenue. Centerville Mayor Michael Kjar agreed, and said small cities and towns like Centerville will be the hardest hit if the measure passes. "We're finding it difficult just to maintain as it is," he said. "This would make it awful difficult.' - Kjar said one option being con sidered by the city is increasing property taxes by seven to nine mills. "That's really about all we can do," he said. "We're already pushing the limit on our franchise tax." The franchise tax allows cities to impose up to a 6 percent user tax on utilities. Centerville is currently collecting col-lecting 5 percent from residents. "I agree it's a regressive tax," Kjar said, "I don't have any problem prob-lem with the philosophy of the cut, but what you're really looking at is cutting vital services or shifting taxes." North Salt Lake Mayor Jake Simmons said his city will take a loss of $70,000 to $80,000 if the initiative in-itiative passes. Simmons said one of the options presented by many of the cities in Davis County is to petition the state for a bigger chunk of the sales tax revenues. Currently, local entities receive 63-64 percent of the sales tax collected. The rest goes for state |
