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Show Park City loses tax dollars to valley bedroom communities bv Christopher Smart Park City lost locally-generated tax revenues to other Utah communities communi-ties during fiscal year 1983-84 according to a non-profit tax research organization. During the past fiscal year $145,211 of sales tax funds collected by Park City merchants have been redistributed throughout Utah, according ac-cording to the Utah Foundation, an organization supported in great part by large businesses. The sales tax rate in Park City is 6U percent. But only 78 percent of the general sales tax comes back to the communities where the taxes were gathered. Seven-eighths of one percent of all retail sales in Park City last fiscal year totals $1,044,831, according to the Utah Foundation's report released re-leased this week. Of those funds. Park City received only $899,620. The figures are based on computations supplied by the Utah State Tax Commission, said Allen J. W itt, the organization's spokesman. The report did not consider Park City's resort sales tax of :,t of one one percent which gathered more than $000,000 for the municipality in 1983-84. Witt said in 1983 the Utah Legislature raised the "local option" sales tax rate from 'U of one percent to 78 of one percent but set down a new method for allocating funds back to local taxing entities. If local taxing entities decided to increase sales tax rates (which Park City has done) they had to agree to an allocation formula which included a gradual phasing in of a population factor which would redistribute 50 percent of those taxes according to population, Witt explained. One provision of the 1983 law was that any local taxing unit that elected to increase its local sales tax and accept the new method of allocation elected to increase its local sales tax and accept the new method of allocation assured that it would never receive less than it would have received from the original 3,k percent of the tax receipts collected within its boundaries, according to the foundation. founda-tion. Witt noted that almost from the inception of local sales tax in Utah 25 years ago, there has been conflict among communities as to how those tax revenues should be redistributed. redistrib-uted. Towns without substantial commercial com-mercial activity, the "bedroom communities," Witt said, maintained maintain-ed their residents purchase goods and services from businesses located in other cities. The bedroom communities contended that the "point of sale" allocation system of sales tax revenue redistribution in effect from 1959 to 1983 was not fair. But while the bedroom communities along the Wasatch Front argued to change the allocation of sales tax revenues to redistribute them on a population basis, Park City Manager Arlene Loble said city officials lobbied the legislature not to redistribute funds on population alone. them on a population basis, Park City Manager Arlene Loble said city officials lobbied the legislative not to redistribute funds on population alone. The 1983 option sales tax law is a compromise, Loble said. During the legislature's 1982 general session, a bill to allocate the entire 78 percent on the basis of population was headed off by Park City Mayor Jack Green. Largley due to Green's efforts, Loble maintains, 18 of one percent of the local option sales tax is returned to the point of sale. The foundation study shows that 231 local taxing entities in Utah raised their local sales tax rates last year by accepting the new method of allocation. Of those communities, 23 counties and 169 cities in Utah received more money than they would have under the previous allocation system. But five counties and 34 cities and towns received less money under the formula that takes population into consideration. |
