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Salt Lake County Mayor Jenny Wilson proposes tax hike to solve ‘huge’ budget problems

Hike would be about $33 per year for average homeowner

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Salt Lake County Mayor Jenny Wilson speaks at a groundbreaking ceremony for a new park at 4042 S. 7200 West in Magna on Wednesday, Oct. 2, 2019.

Kristin Murphy, Deseret News

SALT LAKE CITY — In her first budget address — and after what she and previous Mayor Ben McAdams described as increasingly tough budget years — Salt Lake County Mayor Jenny Wilson proposed a property tax hike Tuesday.

“Small cuts and efficiencies do little to solve our huge structural problems,” Wilson said in her budget speech. “This budget does both. And it makes small cuts along with necessary changes to ensure our financial health in the face of ongoing challenges.”

Wilson’s proposed tax hike — which is subject to the consideration of the Salt Lake County Council — would be an 8.74% tax adjustment, or about $11 for every $100,000 of value in a county resident’s home. To the county’s median family, that means about $33 more a year, Wilson said.

The tax hike would bring in about $17.7 million in additional revenue to the county, bringing its total budget to about $1.4 billion, according to the county’s chief financial officer, Darrin Casper.

Wilson acknowledged the hike is “significant to those of us who are sending kids to college, preparing for retirement or living on a fixed income.”

“But our county needs to remain committed to the values that we have long supported and to the quality of life of every citizen,” she said. “Without this adjustment, we literally would have no choice but to close recreation centers, slim down critical programs for our aging populations, and perhaps risk not maintaining mandatory services provided by our clerk, our treasurer, our sheriff and others.”

Wilson also said the county faces “unusual pressure” this year due to “significant unfunded mandates” by the Utah Legislature and the upcoming 2020 election. The county clerk’s office, Wilson said, is looking to facilitate the “largest election in history” next year, expected to cost $4 million.

Additionally, state leaders created two new courts in the 3rd District, one of which serves Salt Lake County, but the state did not provide funding to run them, Wilson said. That will cost the county around $1.8 million, according to Casper.

The tax hike proposal doesn’t come out of the blue. Years prior, Wilson’s predecessor, now-congressman McAdams, repeatedly proposed lean budgets with no tax hikes, but not without warning budgets were becoming increasingly strained. Former Salt Lake County Sheriff Jim Winder, as the jail faced overcrowding and other challenges, predicted a tax hike was inevitable.

For years, the county’s purchasing power has eroded due to inflation, Casper said, while revenue has been flattening as property tax rates have declined over time because state statute doesn’t allow tax rates to adjust for inflation. The dollar from 2013 only buys 87 cents worth of goods in 2019, Casper said.

At the same time, the population of the county has been growing steadily. In 2018 and 2019, Casper said Salt Lake County began “slipping” from its structurally sound position.

“Over the past decade, home values in Salt Lake County have nearly doubled,” Wilson said. “Incomes are on the rise, population is growing steadily, and we haven’t been able to capture any of that growth in our property taxes. This is a true barrier for local governments. ... This problem is not sustainable anymore.”

Wilson told the Deseret News in an interview after her budget presentation that even though county leaders have avoided a tax hike for years prior, she felt “forced” to propose it this year.

“I just felt there was no choice,” she said, adding that proposing a tax hike isn’t exactly something she “wanted to do” in her first budget proposal as mayor, but she needed to confront reality to avoid facility shutdowns or layoffs.

“We are structurally imbalanced, so we could have gone deeper with cuts, but we would have been back here next year again,” she said. “The biggest challenge is when you have a budget the size of ours when you can’t capture inflation and costs go up, and then you add in state mandates and the cost of an election ... we’re not really faced with a choice.”

In budget deliberations, Wilson said her administration was faced with cutting a park or a recreation center — even after voters approved a parks bond in 2016. This year marked a pivotal moment for the county’s future, she said.

“There was a moment that we sat around as a team and recognized if we were not to move forward ... we would be changing the course of what our county does,” she said.

Wilson said her budget is “balanced and responsible,” prioritizes public safety and essential services, “maintains funding for the critical needs of more than a million residents,” while also not offering “aggressive expansions to any county programs or initiatives.”

“The budget before you is structurally sound, with no frills,” Wilson said, noting that in drafting her proposed budget, she said “‘no’ to many worthy programs.”

“We asked all county departments to take a hard look at cuts because we knew we had to dig deep,” she said. “I have been humbled to see the thoughtful — and oftentimes painful — sacrifices that employees have offered up to ensure we could stay afloat. When we find waste at Salt Lake County, we cut it.”

Those included $12.7 million in cuts, including $8.1 million in budget request eliminations, $3.2 million in budget request reductions, $490,000 in departmental “stress tests” and operating cuts, and $900,000 in energy reduction thanks to utility savings as the county transitions to cleaner energy.

In addition to cuts, Wilson does include one major initiative with a price tag of $760,000 for six new full-time employees to help the Salt Lake County District Attorney’s Special Victims Unit increase its domestic violence caseload — a budget item Wilson pledged to back fiercely.

Wilson’s budget proposal also includes a 2.75% salary adjustment to full-time employees with no increase to health care costs.

Wilson’s proposed tax hike comes after the Deseret News first reported in July that Wilson was considering proposing a property tax hike — citing public hearings in which she addressed flat revenues and indicated talk of a tax hike was already happening — but at the time Wilson said she wasn’t yet prepared to propose a tax hike.

After Wilson’s budget speech, two County Council members from the council’s Republican majority told the Deseret News they needed to dive deeper into the details of the mayor’s budget proposal, but expressed initial appetite to lower if not eliminate the proposed tax hike.

“I’m not a proponent of a tax increase,” Councilman Steve DeBry said. “It may be inevitable once we cut and dice and everything, but I think that 8.74% is the ceiling, and we’re going to do everything we can to whittle it down to still provide essential service and still keep everything structurally sound.”

Councilwoman Aimee Winder Newton, calling herself a “budget hawk,” said she’ll go through the budget and “make sure we’re looking for any expenditures that are necessary that we can cut.”

“I believe that there’s always places to cut in government budgets,” she said. “I’m going to do my best to make sure this is a lean and mean budget.”

Wilson, a former councilwoman, welcomed the County Council to seek out any additional cuts — or to propose a lower rate — but she stood firmly by her statements that a tax hike this year is necessary.

“We can pull that rate back, it doesn’t need to be the rate that I propose, but that’s the one I landed at to keep things at a modest level without a lot of new programs,” she said. “I don’t think you can get back to ground zero without making some very devastating cuts. ... But if they find a way to do things differently, then they’re elected to do just that.”