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Show THE ZEPHYRJULY 1991 PAGE 10 tax trade-off- s who wins? who loses? by Ken Davey Moab City Council members had an opportunity to do something very different In June. They looked at the tax structure that exists here In Moab. looked at who pays and who doesn't. And they decided to change H In an almost revolutionary way. The council voted to double the local sales tax and completely abolish city property tax. Their aim was to reduce the burden on local residents, while Increasing it on the vast number of visitors flowing In and out of town. And their plan will work, In that more revenue will be generated, and a higher percentage of that will come from viaitors. But their plan will also hurt a significant number of people who live in lloab, the people who can leaat afford IL comes to keeping her child healthy. Other than that, she keeps expenses fruit juices, and the laundry pretty low. But put It all together, the vegetables and meat and of other amall Items needed detergent and dishwashing liquid and toothpaste snd the myriad a week, on taxable Items. $150 for everyday life, and she finds herself spending probably week. That's 75 bucks a year. Under the city's new plan, that's $1.50 in additional taxes a for local ends up with a tax save residents, to under the The single mother, money plan comers when It Increase. Municipalities have 4 baalc ways of raising revenues. The first Is user fees, charged for services ranging from water and aewer hookups to building inspection to license fees. The second Is the local share of the state sales tax. The third is the gross business license fee, essentially a local sales tax tacked on to the state rate. And the fourth Is local property taxes, charged on land and buildings. With that money, the city keeps the water clean and fixes broken sidewalks and repairs potholes In roads snd sends out police patrols. Moab haa about 4,000 residents. But in reality the town Is much larger than that, attracting on any given weekend and all through the summer as much as double and even triple that number of people. So in fact the city government has to provide services for s town closer to 10,000 than 4,000 people. How can a small town do that? City council members thought long and hard. And one member, Dave Sakrison, a thought little bit harder than the others. Sakrison looked at the city's revenues. He realized that the state sales tax Is out of the hands of local government But the local sales tax and property tax were completely determined by local government officials. He also realized that while property tax Is paid mostly by people who live and work in Moab, a huge percentage of the local sales tax Is paid by people visiting the area. And his Idea was simple and creative: let's Increase the tax paid by the viaitors, and decrease the tax paid by local residents. Let's double the local sales tax and abolish the local property tax. Sakrison presented the plan to the rest of the council, and they went for it The results, according to city budget predictions, will mean about $400,000 In added revenues from the local sales tax, and about $170,000 in lost revenues from getting rid of the property tax, a net gain to the city of more than $200,000. More tax on less tax on residents. To use the political term now more popular than any situation" for the town. other since "silent majority," this Is a "win-wi- n rs, Is It an effort to "get" the visitors? Yes, and not even visitors see too much wrong with that Moab Is not Palm Springs, people don't come here to lounge In high class resorts and sample tour star cuisine, and pay for the privilege. If you add all the viaitors together, from the groups of bikers In spring and fall to the rafters of the summer to the families on tour of 12 national parks In a week, you'll find most of them drop, maybe, the SO bucks a day on the average here In town for taxable goods and services. By doubling the local sales tax, you're charging them an extra 50 cents, and they aren't sitting around Boulder or Park City saying, "last year it cost $100 for a weekend in Moab, but now It's up to $101, so let's go to Vegas instead." AAA-dealgn- ed But unfortunately the council avoided the other side of the local aales tax question, and that is that local residents pay as well. It isn't just tourists who fork over more money at the City Market register, or at Brig's, or McDonalds. It Is everyone In town. There is a woman I know, a single mother raising a preschool child on her own In Moab. She wanta to stay here, but it la difficult. She haa certain employment skills, but they don't always fit most of the jobs that are open. But ahe scrapes by, a little here and a little there, and it adda up to enough to feed herself and child, and she's even managed to stay off of atate and federal aid programs. But she does have expenses. There's food, and she makee sure she doesn't cut BREAKFAST How many others are in the same situation? Quite a lot. Let's take a family of four, who own their own home. Let's say they spend about $200 dollars a week on taxable items here In town, s low amount for a growing family. But even taking that figure, that family ends up paying an extra $100 per year In local sales tax. But ah, say council members, you are forgetting that the family will save money, because we abolished the property tax In the city. But for that family, In order to save as much In property tax as they spend In extra sales tax, would have to own a home valued at $75,000. Families with property above that level save money. Families with no property, or less than that amount, pay more. But those owning the most valuable properties In town will do quite wed with the plan. The owners of City Market (a Colorado company) will save about $3,200 In property tax. The owner of the Ramada Inn will save about $3,000, The Greenweil, about $2,750, Super 8, $2,400, The Landmark, almost $1,500, The Travelodge, somewhere in the neighborhood of $2,240. LUNCH DINNER FINE MEXICAN & AMERICAN MEALS SINCE 1981 574 N. MAIN 80-- 1 state liquor license MOAB, UTAH 259-631- 9 now open at 6 am closed when I'm tired of making tacos |
