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Show Sales Taxs Will Cities Raise? By GARY R. BLODGETT News Editor It's "decision time" for Utah's cities and counties. coun-ties. DURING THE coming weeks, cities and counties throughout the state must decide whether to increase their local option sales tax and agree to a new method of allocating such (tax) funds or to continue with the present three-quarter percent local sales tax. According to an analysis prepared by the Utah Foundation, a private, non-profit tax research organization, orga-nization, this decision oy cities and counties will have an important bearing on the future finances of these local entities. UTAH'S 1983 Legislature enacted bills which allows cities and counties to raise their local sales tax by one-eighth percent - from three-fourths to seven-eighths seven-eighths percent -- for the next four years and then to a total of one percent beginning July 1, 1987. However, if a city or county accepts the proposed tax increase, it must also approve a new method of allocating local salse taxes -- which, in some cases, will means sharing such revenues with other local entities. PRESENTLY, CITIES and counties can levy a local sales tax up to three-quarter percent and retain all the revenues - minus a small administrative charge by the state to distribute the funds and receive all monies from sales within their boundaries. bound-aries. Under the new law, entities which raise taxes must agree to a gradual phasing in of a ' 'population factor' ' in the allocation of such funds, according to the following schedule: BEGINNING in fiscal year 1983-84, sales tax collections col-lections will be based 75 percent on "point of sale" and 25 percent on population (of the city or county receiving the money). This schedule will be adjusted annually so that the percentage of population will be increased by fiy percent and the point of sale decreased by five' per- ' cent until in 1988, and from then on, the ratio will be 50 percent population and 50 percent point of sale. WHAT WILL this mean to Davis County? Under the proposed population-point of sale amendment, North Salt Lake and Woods Cross would not have an increase while Davis County and all other cities within the county would gain revenue. THE FOREMAT of House Bill 13, which proposes the revised distribution of sates tax, would reduce North Salt Lake's projected revenue in 1984 by $61,555 from $84,169 to $22,614. Woods Cross would see a cut of about $36,000 from approximately $60,000 to about $23,000, according to the Utah Foundation report. Davis County, as a whole, would receive a whopping whop-ping $835,597 estimated increase in 1984 over 1983. i Total revenue would amount to $1,779,869 compared com-pared to $944,272. BOUNTIFUL, according to the report, would benefit be-nefit the most from the revised sales tax distribution ; schedule -- increasing slightly more than $168,000 from $224,301 to $392,399. Clearfield and Kaysville will also see drastic increases in-creases in the proposed schedule with Clearfield jumping from $101,286 to $231,246, a whopping $129,960. Kaysville's sales tax increase will more than triple under the new proposal, from $33,599 to $143,139 -- an increase of $109,540. DAVIS COUNTY Commission will have about $164,070 to budget in 1984, an increase of $1 16,202. Other cities and the amount of increases projected are as follows: Centerville, $93,761, an increase of $35,282; Clinton, Clin-ton, $96,560, an increase of $92,434; Farmington, $67,922, an increase of $51,132; Fruit Heights, Vx$44,179, an increase of $40,433; Layton, $278,485, "-an increase of $52,839; South Weber, $24,374, an increase of $20,739; Sunset, $77,209, an increase of $49,507; Syracuse, $42,171, an increase of $14,278; West Bountiful, $42,622, an increase of $18,579; and West Point, $36,141, an increase of $34,419. AS CAN EASILY be seen, the largest increase comes in communities where there is very little commercial com-mercial sales. Clinton, Fruit Heights, South Weber and West Point, for example, each had sales tax revenue of less than $5,000. Clinton had only $4,126 in sales tax last year but will realize $96,560 under the new proposal - nearly 20 times its current sales tax revenue. Percentagewise, Percentage-wise, West Point is in the same boat with an increase of more than 20 times its current revenue. ON A STATEWIDE basis, if all local entities decide de-cide to raise their local sales tax by the recommended one-eighth percent, the new allocated formula will generate an additional $13.9 million next year. At the same time, the state will recognize a "nest egg" of $13.9 million as its share of the total one-fourth one-fourth percent sales tax that will be assessed to all retail sales. THE UTAH Foundation report emphasizes that while most entities will have substantially more revenue re-venue than the added tax imposed, a number of cities - including Price, Roosevelt, Green River, Park City, Alta, Murray, South Salt Lake and Vernal --will --will derive no additional revenue from the tax increase. in-crease. It should also be noted that the Davis County figures are based on 1984 estimates only and the increases will change in subsequent years with the phasing in of a larger population factor in the distribution distri-bution formula. |