Legislature may take a new look at Wellington's budget shortfall
Wellington City's mass-mailed plea for budget relief to state officials has drawn a response from the top-ranking House member of the legislature's Revenue and Taxation Interim Committee.
"I can't make any promises, but we'll take another stab at it," Rep. Patrick Painter told the city council last Wednesday. Painter appeared with Rep. Christine Watkins just days after the city informed the state it was near default on its $1.4 million in road improvement revenue bonds because of a drastic loss in sales tax revenue.
The plunge came because of SB 277 in 2007, which granted a sales tax exemption for mining equipment with a life span of more than three years. It also changed the point of tax collection from the point of sale to the point of delivery. For Wellington, it meant a $166,000 loss in tax revenue, or about quarter of its budget, Mayor Ben Blackburn told Painter.
As a result, Wellington had to cut its full-time work force from 11 to seven workers. The mayor has put in volunteer time grounds keeping at the cemetery and he and his wife even took over the chore of keeping the restrooms clean at the city park.
The legislature tried to help during its last session, but the relief was not enough. The city will get only $58,000 for five years and the bonds payments have 20 years to go.
"So you're still in a pickle. You'll still be short about $108,000," Painter commented. He said he would talk to his counterpart on the Senate side of the committee to see if Wellington's plight could be put on the September agenda.
Blackburn said he'd be grateful for the opportunity. "If it was our fault, well, shame on us. But Wellington was doing fine" when it applied for and got the loan from the state's Community Impact Board in 2001, the mayor explained. For the first years of the loan, the city had enough to fulfill its payment obligations with enough left over for necessary city services.
Painter said he wanted a copy of the city's line-item budget so he could get a clear picture of the situation and discuss it with the Senate chair of the committee. Blackburn said there's no problem with that.
The bond payments are $28,000 per year.
In 2010, Rep. Watkins introduced legislation to end the mining equipment tax break, but that measure died in committee.
During the last legislative session, the Southeastern Utah Association of Local Governments hired a lobbyist to help draft legislation to give Wellington some relief. When the extent of the impact that SB 277 had on other communities became known, the legislature crafted the bill to make sure that all got a share of limited funds available. That turned out to be less than needed.