Utah’s capital city is “suffering from growth in a positive way,” Salt Lake City Mayor Erin Mendenhall told the Deseret News on Wednesday.
The night before, she introduced her recommended 2026-2027 fiscal year budget proposal to the Salt Lake City Council, framing the city as a growing but financially pressured city facing declining federal funding, rising operational costs, increasing service demands and long-term sustainability concerns.
She said the decision to increase taxes like the proposed 12.5% property tax did not come easily, but is needed to prevent massive layoffs and prevent decline.
If you look “at the economic landscape through the pandemic and coming out of the pandemic, as the federal dollars that came into municipalities dried up, we saw a lot of cities facing significant fiscal cliffs,” Mendenhall told the Deseret News Editorial Board. “The options were very stark for us. It was significant major layoffs or no cost of living increase across the board, and I’d rather keep people employed.”
“This was the most intense budget process I’ve ever been through in my seven budgets, and every day there was a weight on my budget team and me about what the impact would end up being on the residents.”
Future tax policy?
Many of the budget’s rising costs will ultimately be borne by residents and businesses through higher taxes, fees and utility rates, but Mendenhall said existing revenue growth is not enough to cover the ongoing increases.
On Wednesday, she mentioned two possible tax policies that could bring in more revenue for the city that she didn’t mention in her speech to the city council:
The first is a transportation utility fee, or TUF, a monthly charge on utility bills designed to improve transportation maintenance.
Mendenhall said Provo, Utah, has had a TUF fee in place for several years now and “was challenged for a bit, but other cities are exploring it right now. ... I’m excited to see if these other cities in the county are able to implement it, and how they’re able to collect on it.”
The controversy behind the tax is that it can be considered a double tax on property. Homeowners already pay property taxes, but Mendenhall noted that around 43% of Salt Lake City property is nontaxable. Tax-exempt entities like nonprofits, churches and schools that don’t pay a property tax would be required to pay the utility fee.
The second is an entertainment/public gathering tax that is “a tool that municipalities in the state can implement on tickets for sporting events, arts, culture,” she explained.
Her key argument for the tax was that the majority of people who attend events in the city, like a Utah Jazz game or a concert at the Delta Center, do not live in the city. Thus, adding an entertainment tax would generate additional revenue to maintain the infrastructure, security and other resources used to host such events.
Mendenhall said she did not include the measure in this year’s budget because implementing it would require complicated legal agreements involving government-owned venues and other entities, making it too difficult to put in place on such a short timeline.
Creating a gathering place for SLC families
As Salt Lake City prepares to welcome the world once again for the 2034 Winter Olympic and Paralympic Games, Mendenhall wants to establish a gathering place for the city.
“We don’t have an Olympic and Paralympic legacy anything in Salt Lake City, not a plaza, not a building. Rice Eccles notwithstanding, it hosts a cauldron, but it’s not an Olympic legacy museum or park,” she said.
“The Civic Center is our Olympic and Paralympic legacy opportunity.”
The Civic Center, more commonly known as Library Square in downtown Salt Lake, Mendenhall said, is a perfect location to be leveled and turned into a gathering place for locals.
A “kind of daily play gathering, health and wellness kind of space,” she said, “that my elderly mom would want to go sit on a bench every evening, and that kids could learn how to ride their bikes,” or a place for watch parties, “whether that’s for the World Cup or the Winter Classic or the (Olympic) Games.”