(Leah Hogsten | The Salt Lake Tribune) l-r Salt Lake City council chair Erin Mendenhall, Mayor Jackie Biskupski and Mike Reberg, director of the Department of Community and Neighborhoods met with the Salt Lake Tribune editorial board to discuss the mayor’s proposed sales tax increase and bond issue for city roads, Wednesday, April 11, 2018.
Nobody likes a tax increase. And politicians who enact increases often pay the political price.
In February Salt Lake City Mayor Jackie Biskupski announced she would be seeking a sales tax increase and a new bonding measure on the November ballot.
The mayor has now proposed a 0.5 percent sales tax increase that would raise $33 million in additional revenue to fund four major areas: (1) street repair, (2) transit, including additional bus service possibly run by the city itself, (3) public safety and law enforcement and (4) affordable housing initiatives.
According to Biskupski and council chair Erin Mendenhall, 70 percent of residents support the tax increase. What that number really shows is that 70 percent of the public comments the city has received are in support of the increase.
Most city residents would agree that the city needs more money. Operation Rio Grande was expensive, and still requires funding for enforcement and treatment. Salt Lake City streets are in horrible condition, and affordable housing is scarce.
But the mayor announced this proposal in February. Approval in April would be an extremely fast turnaround for a sales tax increase, which is why some organizations, like Downtown Alliance, have expressed concern.
The mayor doesn’t need the public’s support for the sales tax increase, at least not at the voting booth. Mendenhall has scheduled a vote on the increase for Tuesday evening.
Councilman Charlie Luke recently posted on social media that while he agrees with the increase in principle, he’s uncomfortable with the lack of specificity in the mayor’s plan, and the lack of prohibition on using the funds for other projects. He wants the council to have a discussion regarding how to prioritize the four general needs.
A sale tax increase is necessarily regressive because it takes a larger percentage of income from low and middle income families. But in this case, because Salt Lake City is a city center, its daytime population doesn’t contribute much to the tax base for city services. A higher sales tax will help capture more of their share.
But with the increase in state taxes coming to Utah families as a result of the Legislature not decoupling state tax law from the federal government’s elimination of the deductions for personal exemptions, a city sales tax increase is going to add to that burden.