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Bill would bill Utah cities to help pay for homeless shelters

SALT LAKE CITY — A bill that would require Utah cities and counties that don't host homeless shelters — and don't have enough affordable housing — to help pay for shelters in other cities cleared its first hurdle Monday.

It's a bill that's advancing under a lot of political pressure — and one that's been expected all session, but was only filed late last week.

House Speaker Greg Hughes, R-Draper, has called the bill "critical" to efforts to homeless reform and has said it must pass this year. Salt Lake County Mayor Ben McAdams has said if the bill doesn't pass, he'll pull his support of a homeless center now slated to break ground in South Salt Lake this spring.

HB462 would require cities and counties to annually contribute tax dollars of up to $200,000, based on population size and low-income affordable housing stock, to help fund operating costs of homeless shelters that host at least 200 beds.

Cities that currently host or are slated to host shelters — Salt Lake City, South Salt Lake, Midvale, Ogden and St. George — would be exempt, according to the bill.

Yet at least one mayor from one of those cities, along with the Utah League of Cities and Towns, opposes the bill, worried it unfairly penalizes local governments and their taxpayers for a failure in the housing market.

"This is a statewide problem — well the state already receives tax dollars from taxpayers in every city and every town," said St. George Mayor Jon Pike, who is also the current vice president of the league. "If that's the case, if it truly is a statewide problem, then it ought to be done through the state."

But after receiving support from homeless advocates, the Utah Association of Counties, and most lawmakers on the House Revenue and Taxation Committee — who argued the bill would help spread the burden of a statewide issue while also incentivizing low-income and affordable housing development — HB462 passed out of committee on a 9-3 vote Monday. It now goes to the House floor.

"This bill forces no city to do anything about homelessness," the bill's sponsor, Rep. Steve Eliason, R-Sandy, told lawmakers. "It doesn't force them to accept a shelter, it does not force them to build more affordable housing, it does not force them to zone for (low-income housing). However, if they choose not to do any of those things … we're just asking them to pay a greater portion of the share."

The bill's aim, Eliason said, is to fund the estimated $13 million annual operating costs for the homeless centers meant to break up Salt Lake City's 1,100-bed downtown homeless shelter that has troubled the Rio Grande neighborhood and strained Salt Lake City resources for years. Two have been sited in Salt Lake City, one in South Salt Lake, and Midvale's current shelter is expected to be part of the model.

HB462 would collect a total of $3.3 million from cities and counties a year by withholding a portion of the jurisdiction's sales tax each year. The state would also pay $3.3 million a year out of its general fund to bring the total of public dollars to $6.6 million, and the private sector would be responsible for fundraising the other half of the operating costs, Eliason said.

Costs to counties and cities would be assessed by population and their low-income and affordable housing stock.

For cities with populations of more than 5,000 that have both a lower percentage of affordable housing and a lower percentage of low-income housing than the statewide average, their fee would be assessed by multiplying its population by $2 — but would be capped at $200,000, according to the bill.

If they don't meet those statewide averages, cities with populations over 100,000 like West Valley City, Provo and West Jordan would max out at $200,000. Cities with populations slightly under 100,000, like Sandy and Orem, would come close to the max, while smaller cities like Murray and Draper would be assessed $90,000 to nearly $100,000.

For smaller cities with populations under 5,000 or rural counties, their fee would be calculated by multiplying their population by $1. For example, Kanab, with a population of about 4,500, would pay $4,500 a year.

If cities and counties have a higher percentage of either affordable housing or low-income housing than the statewide average, but not both, their populations would be multiplied by 50 cents. If both averages are higher, they'd be exempt from the fee.

Eliason said there are some cities he expects to be exempt because their affordable housing or low-income housing stock surpasses the statewide average, but the only one he could name off of the top of his head was Park City.

County fees would be based off of unincorporated populations only, according to the bill.

The Utah Association of Counties supported the bill, with spokesman Lincoln Shurtz saying the organization "recognizes the partnership" counties have with the state to deal with homelessness issues.

But Cameron Diehl, executive director of the League of Cities and Towns, called the bill "problematic" for cities because it would leave "holes" in their budgets, and their taxpayers would be asked to pay both state and city taxes for the same problem.

"Affordable housing is a market failure, and it is unfair to punish cities and taxpayers of those cities because of that market failure," Diehl said.

Tensions rose Monday when Rep. Brad Wilson, R-Kaysville, rebuked Diehl, telling him, "It just blows my mind that you're saying cities don't have some kind of partnership with the state in this endeavor and effort."

But Diehl said cities are "willing partners" when it comes to public safety and other services, but not when it comes to forcing them to pay for operations of facilities managed by a nonprofit in other cities.

Rep. Karianne Lisonbee, R-Syracuse, said she had "major concerns" with the bill, calling it "inequitable." But Rep. Gage Froerer, R-Huntsville, threw his support behind the bill.

"We can either continue to throw more money at these homeless shelters, or we can address the root of this problem: affordable housing," Froerer said.

Meanwhile, another bill is in the works to also use sales tax from cities to fund police and fire for cities currently hosting homeless resource centers. The bill, being sponsored by Senate Minority Leader Gene Davis, D-Salt Lake City, has not yet been filed.