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County, districts face tax shortfalls

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Utah County's commissioners are staking a cautious route in setting the certified tax rate for property in the county.

They don't believe the numbers being offered by the Utah State Tax Commission.According to the tax commission, Utah County can expect roughly $9.2 million in sales tax revenue to be generated by the one-quarter-cent county sales tax imposed last year.

The sales tax revenue is supposed to replace what would be lost by a reduction in the certified tax rate - but not generate more.

Counties who adopted the sales tax would have a revenue source that could rise to reflect growth but not create a windfall for an individual county.

"We cannot go over or under," said Commissioner David J. Gardner.

Therefore, the certified tax rate must be set low enough to reflect the sales tax revenue but not so low as to create a shortfall for the county if the amount of sales tax is overestimated.

Commissioner Jerry Grover said in five months the Tax Commission has collected only $1.3 million and failed to notify many businesses of the need to begin collecting the new county sales tax.

"Because of mistakes and errors, there's no way we can expect it to be $9.2 million by the end of the year," Grover said. "We can get clobbered here."

Grover said the ultimate danger is in believing the numbers, setting the rate and ending up short.

"The $9.2 million is never going to happen," said Gardner.

Commissioner Gary Herbert said he believes the Utah State Tax Commission recognizes the county's problem and concern.

"There's no way to guarantee an accurate projection," he said. "We all understand the problem. The question is what do we do?"

Utah County needs to set its certified tax rate within the next few weeks, said Deputy County Clerk Jim Sutherland. "We can't adjust the rate because we don't know what's going on (with the Tax Commission)," he said.

Herbert said until the county commissioners are comfortable with the projections, they're not going to set the rate.

"We're all united in that," he said.

Grover said he wants to know who will pay the difference for taxes not collected before he votes to adjust the rate.

Herbert said the legislation that made it possible to swap the county sales tax revenue for a portion of the property tax revenue, "is silent on what will be done" when mistakes are made.

All three agreed they need to sit down with the Tax Commission and resolve the questions.