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Show Cedar City produces $Vz million in sales tax revenues Utah's local sales tax produced $550,985 in revenue for municipal and county purposes throughout Iron County last year, according to an analysis completed by Utah Foundation, Foun-dation, the private tax research organization. These collections were equal to a county wide property tax levy of 10.04 mills ($10.04 per $1,000 assessed valuation). Local sales tax revenue received by Cedar City in 1977 totaled $457,713. According to the Foundation study, this was equivalent to an added city property tax levy of 20.21 mills ($20.21 per $1,000 assessed valuation). Another 1.13 mills would have been needed to replace the local sales tax revenue now being received by the county government. During the 1978 Budget Session, a proposal was made to begin phasing out the sales tax on food. Foundation analysts calculate that such a food exemption would reduce sales tax revenues currently received by state and local units in Utah by about 16 percent. Total revenue loss from such an exemption would amount to $56 million per year throughout the state and would be equivalent to one of the following: 1. A one percent increase in the sales tax rate on all non-food items, 2. A 25 percent across-the-board rise in individual income tax rates, 3. A property tax increase of 12.9 mills ($12.90 per $1,000 assessed valuation.) By July 1, 1978, 22 of the states plus the District of Columbia will have eliminated the sales tax on food. Several of the other states provide for a food tax credit that can be applied against the state income tax. Utah established a one-time food tax credit of $6.00 per person in 1973. The credit amounted to $5.9 million and was claimed for 86 percent of the state's population. Foundation analysts indicated that Utah probably would have to raise some other tax if a food tax exemption is provided. Although Utah reported substantial state surpluses in several of the past years, it is inlikely that any large surpluses will be generated in the years immediately ahead. The report notes that the prospect of rising school enrollments, increased retirement and social security costs for public employees, a backlog of building needs, the scheduled repayment of authorized bond issues, along with other factors will place considerable pressure on future state budgets. In analyzing the local sales tax, the Foundation observed that the local option tax now is imposed all 29 counties of the state and produced more than $44 million revenue for local units. At the present time, the localsales tax would be distributed according to population. Such a change would require an amendment to the state constitution. Proponents of the change to distribute local sales tax money according to population contend that a large part of the revenue received in some of the cities currently is paid by individuals living in other communities com-munities or in unincorporated areas. Opponents of the change, on the other hand, argue that cities must provide many governmental services for nonresidents who work, shop, or otherwise enjoy the amenities provided by the city. As a result, they claim that the sales tax paid by such nonresidents of the city merely reimburse the community for a small part of the added costs for such services. The famous Roman speaker Cicero got his name from the word for wart since he had one on the tip of his nose. |