PROVO — Utah Valley residents have dodged a county tax increase for the seventh consecutive year, but that streak could be snapped as soon as 2005, county commissioners warned Tuesday as they approved a balanced budget for 2004.
"We are in the fourth year of reductions in sales tax revenue and property tax revenue," Commissioner Gary Herbert said. "If the economy does not improve and does not improve our revenue stream, we will either have to cut services or raise taxes."
Herbert said it would be difficult to cut services in the face of rapid population growth.
"Eventually," he said, "there is a tax increase in your future."
The three-man commission chose to delay the rare tax increase in hopes the economy would improve and allow further postponements of a hike. The commissioners made up for a lack of revenue and balanced the '04 budget by using more than $3 million they were setting aside to expand the county jail in Spanish Fork.
"We're robbing money that would go to a future expansion project at the jail," Herbert said, "but we're doing it to see if revenues will increase next year."
The commission has a record of frugality. It hasn't raised taxes since 1997, when the jail was completed, Herbert said. The commissioners' decision Tuesday to avoid a hike for another year drew praise from Howard Stephenson, a state senator who represents northern Utah County and doubles as president of the Utah Taxpayers Association.
"Utah County has historically been one of the best-managed counties in the nation, as evidenced by its low expenditures per citizen and low taxes," he said. "We believe without hesitation it is the best-managed major county in the state of Utah."
Stephenson said the association's analysis is based on figures from the U.S. Department of Commerce.
The commissioners openly admitted the use of money from the capital fund earmarked for the jail is a departure from past practice that could make it more difficult to avoid a tax hike.
"We are deviating from those fiscal principles we've used for years," Commissioner Jerry Grover said. "This is a philosophical shift."
Stephenson agreed the unusual tack could lead to a tax increase.
"There is a concern about the use of one-time money to pay for ongoing expenditures, and we hope the commission will make sure that doesn't eventually result in a tax increase," he said. "The taxpayers association believes the county should be able to live within its current structure."
A tax hike could be additionally painful for county residents if they are allowed to vote on and then pass a suggested quarter-cent tax hike suggested by the state legislature for mass transportation.
Herbert said a tax hike is inevitable because the current system doesn't allow for inflation or increases in personnel costs, such as benefits for the county's 800 employees.
"By design, sometime eventually, we'll have to raise taxes to cover those increased costs," he said, but he reiterated his desire to postpone that time as long as possible.
Stephenson said county residents have been the beneficiaries of smart long-term planning that has curtailed spending.
"Utah County's decision, reaffirmed over many years by several commissions, not to allow major residential areas in unincorporated areas has saved money," he said. "The county has not been addled by the burden of providing city services to unincorporated areas as Salt Lake City is."
E-mail: twalch@desnews.com