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WILL 1% RESTAURANT TAX GO UNUSED?

SHARE WILL 1% RESTAURANT TAX GO UNUSED?

If the Utah Legislature does not provide funding for the Utah Valley Special Events Center within the next few years, Utah County likely will stop collecting the 1 percent restaurant tax and will return funds collected back to taxpayers.

When voters approved $7.7 million in general obligation bonds last April, county commissioners said it was their intention to repay the bonds with the restaurant-tax proceeds.County officials estimate the tax will bring about $800,000 a year into the county's coffers. The annual bond payments are estimated to be about $700,000, which leaves the county about $100,000 a year to spend on other cultural, tourism or recreational projects. Commissioners said the extra money will be used to support community celebrations throughout the county.

Commissioners first said they would not impose the tax until they were ready to issue the bonds. However, commissioners later changed their minds and imposed the tax Oct. 1 of last year. Commissioners said the county will save several hundred thousand dollars by building up a reserve fund and bonding for less.

Because commissioners told residents that the majority of the tax proceeds would be used to pay off the special events center bonds, Commissioner Malcolm Beck said if the project does not come about the county should stop collecting the tax.

"I wouldn't feel good about proceeding with the tax if the (special events center) does not come to fruition," Beck said.

Also, because commissioners told residents at the time they imposed the tax that proceeds would be used to build up a bond reserve fund, any money collected should not be used for any other purpose, Beck said.

"The money is there for the building, so if that doesn't go forward we'll have to remit it back some way," he said.

If someone were to approach county officials with another proposed use for the tax, Beck said the county should hold another public hearing on the matter.

"We'd have to do some serious soul-searching before we'd keep it," he said.

Utah Restaurant Association officials hope Utah County officials have no choice but to remove the tax next year. The association is attempting to get a referendum to repeal the tax placed on the November ballot. To get the issue on the ballot, the association must have 65,000 signatures by July. The association has petitions in restaurants throughout the state.