Some Utah residents are still subject to double taxation because counties aren't accounting for their finances adequately.
That's the finding of a performance audit of municipal and county taxation by the legislative auditor general released Monday."Few counties accounted for all of the expenditures, nor did they identify all revenues related to providing municipal services," the audit report states. "Most counties have taken only the first step in alleviating inequitable taxation concerns."
In 1971 the Legislature required Salt Lake County to establish a separate fund for municipal-type services provided to residents of the unincorporated county: police, fire, garbage collection, planning and zoning, streets, etc. That was later expanded to the 13 largest counties in the state.
The intent of the fund was to make sure residents of cities weren't paying for municipal services provided only in unincorporated areas. In Salt Lake County, as in a few other counties, residents in unincorporated areas pay an extra property tax for municipal services. Other counties fund the service primarily through sales taxes.
Notwithstanding such separation, however, city residents, particularly in Salt Lake County, have continually complained that they are still paying for municipal services in unincorporated areas -- double taxation.
The report basically says they're right.
Various efforts have been made over the years to correct inequities, but, the report states, they haven't been enough. It concludes the solution generally lies not with the Legislature but with cities and counties themselves.
"We recommend that Salt Lake County (for example) and municipal representatives meet on a regularly specified basis to explore alternatives and to continue the process of sharing information, identifying issues and negotiating solutions to inequitable taxation issues," the report states.
The best recent example of double taxation in Salt Lake County occurred with regard to paramedic services -- for which all county residents pay. Despite the county's offer to install paramedics in Salt Lake City fire stations, the city's firefighter union refused. Thus, city residents are paying for paramedic services they do not receive.
That situation is currently at an impasse.
Another example is county jails. Salt Lake County Commission Chairwoman Mary Callaghan estimates that the counties' cost of holding violators of city ordinances has reached $22 million, which remains unpaid.
Other problems arise because of difficulty for accounting exactly what proportion of a service -- say, the patrons of a given park, or the investigative division of a sheriff's office -- is used by city residents.
"Identifying specific inequities is difficult due to the complex interrelationship of revenue collection and delivery of services by cities and counties," the report states.
City director of management services Roger Black said cooperation between cities and counties, which the report recommends, is all well and good, but cities have an inherent disadvantage in such negotiations.
"To date, the city has had to rely on the courts and the marshaling of public opinion to secure movement by the county toward full compliance with state law," he said. "As the audit report correctly concludes, there is still a ways to go."
Black wants the Legislature to force counties to be accountable to cities.
For her part, Callaghan says the report is deficient in that it does not adequately define "double taxation," preferring instead the more general term "taxation inequities," which may or may not consist of double taxation.
" 'Double taxation' is an elusive concept frequently advanced for a political reason unrelated to any meaningful legal or fiscal definition of the concept," she said.