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IMPACT OF TAX VARIES IN DAVIS CITIES

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How will the loss of the sales tax on food affect local governments in Davis County?

The answer can be found in the local supermarket.Officials of smaller cities that have few or no grocery stores don't see the sales-tax initiative as a threat to their economies, because the revenue obtained is small.

Woods Cross City Manager Bret Wahlen said the initiative would "impact the city only on a minor level," because the city has only small convenient stores like 7-Elevens and Circle K's.

"We haven't felt the real need to look at the initiative just yet," he said. "The impact would be very small."

In contrast, Farmington finance officer Donna Sharp estimates that Farmington will lose more than $75,000 in a fiscal year just from Smith's Food King if state sales tax is eliminated. Farmington has another major grocery store, and the $75,000 figure is only a small portion of what the city could potentially lose.

The Utah State Tax Commission distributes sales-tax revenues to cities in Davis County and the rest of the state. The revenue allocated to a city is figured by population rate and "point of sale," the number of grocery and convenient stores located within city limits.

In contrast to statements from other city officials, Kaysville City Manager John Thaker said while Kaysville has only one supermarket, city officials estimate an alarming loss of $80,000 if the initiative is passed.

"Stores play a role, but our concerns are how much tax revenue is collected throughout the state," Thaker said.

Thaker said the initiative could cripple Kaysville because the city doesn't have tax surpluses to make up a potential deficit.

"Our city has a tight, balanced budget every year," he said. "We just don't have any fat. If you cut out sales-tax revenues, you cut out city services. It's that simple."

In West Bountiful, there are no supermarkets. As a result, city leaders "haven't examined the sales-tax issue in great detail." A spokeswoman for the mayor's office said West Bountiful residents purchase their groceries in supermarkets located in neighboring cities; therefore, their point of sale is low.

"Ramifications of the initiative would be small," she said. "In a city without major supermarkets, removing sales tax from food has no significant impact on our local government."

But it will have a profound impact on North Salt Lake. Mayor Jake Simmons explained he is publicly opposed to financial restrictions the tax initiative would put on the city. Figures from the Utah State Tax Commission show North Salt Lake could lose more than $80,000 in the next fiscal year if sales tax is eliminated.

"It's hard to lose that kind of money," he said. "In this city, we already run a tight ship."

"Our city is opposed to the sales-tax proposal," said Bruce Barton, the city manager of Layton."People need to know that any funds removed in a city always need to be made up."

If the initiative is passed in November, the anticipated loss of revenue to Layton could be more than $353,000 during next fiscal year.