Analysis evaluates Utah tax funds flow
The Utah Foundation recently released an independent research report evaluating the flow of state tax revenues and expenditures.
The analysis represents a new approach toward understanding how Utah government spends the state's financial resources, pointed out the foundation.
Additionally, the report provides insight into net beneficiaries and net payers in the balance of taxes collected versus state funds expended within Utah's 29 counties.
The amount of state monies expended for every dollar local residents send to the state's coffers varies widely from 12 cents in Summit County to $4.35 in Sanpete, noted the foundation's financial analysis.
For the most part, counties clustered around the Salt Lake Valley are net payers, indicated the foundation analysts.
The urban counties around Salt Lake provide more in tax revenues to the state's coffers than the areas receive in public services.
Rural counties tend to benefit from the redistribution of the state's financial resources, noted the foundation report.
"Rural counties without the ability to raise resources on their own due to a small tax base are more dependent on state funds to provide services such as public education. The exceptions to this are Washington and Grand counties, which benefit from tourism and a larger economic base," explained senior research analyst Janice Houston.
For every $1 in tax revenues generated by Davis County residents, the state returns 82 cents in public services, according to the foundation's financial analysis.
In Salt Lake County, the ratio is 80 cents for every dollar. However, Salt Lake houses many state offices that do not have significant expenditures outside the county.
When the state offices are taken into consideration, Salt Lake County's ratio climbs to 96 cents for every dollar of revenue, added the foundation report.
In addition, 62.7 percent of all state employees work in Salt Lake County.
The state employees' personal spending within the county is an indirect benefit to Salt Lake's coffers in the form of sales tax and other revenues.
Additional findings in the foundation report included:
With the exception of Cache, kindergarten to 12th grade public education expenditures comprise the largest portion of state expenditures in Utah's counties.
In Cache County, higher education funding to Utah State University surpasses the revenues allocated to K-12 public schools.
In all counties, support for low-income programs like temporary assistance to needy families, food stamps and Medicaid made up a small portion of total state funding.
Medicaid expenditures accounted for no more than 10 cents for every dollar of revenues generated in all counties except San Juan. For state funding of TANF and food stamps, expenditures did not exceed 5 cents for every dollar of revenue, except in San Juan County.
Jail contracts and reimbursements are integral to the economies in small rural counties.
For example, the contracts provide almost $1 million in state revenues for Daggett's budget or 7.5 percent of the total income generated within the county.
Utah County is a net beneficiary of state tax funding.
The situation is due to department of human services expenditures for programs related to the state hospital in Provo and the developmental center in American Fork as well as Medicaid funding to medical treatment facilities located within Utah County.
Where present, higher education expenditures comprise a large percentage of state expenditures within a county.
Carbon, Iron, San Juan, Sanpete, Sevier and Weber counties received a significant boost in state spending levels due to the colleges and universities within local communities.
"The fact that there are differences between who pays the taxes and who receives the benefits is no surprise. That's something governments frequently do. Nevertheless, we were surprised by how stark the differences are. However, readers should understand that this is not the result of a grand scheme to shift funds around the state, but is really the result of many separate decisions about programs and budgets over time," concluded Houston.