Tax watchdog questions open space tax initiative
County clerks at various locations across Utah are counting signatures to determine whether supporters of an initiative have gathered an adequate number of signatures to place a tax increase on the November 2004 ballot.
The initiative would increase the statewide sales tax from 4.75 percent to 4.80 percent in order to fund open space preservation.
According to the Utah Taxpayers Association, the proposal has several flaws:
Earmarking general tax revenue for specific programs is bad policy. The open space tax would statutorily earmark sales revenues for preservation. Earmarking reduces government's budgetary flexibility. Flexibility is especially critical when government experiences budget problems. Governments rely on shifting funding from one function to another in order to address needs while not increasing taxes.
Instead of promoting higher taxes, open space promoters should be lobbying the Utah Legislature for funding just like other members of the spending lobby.
However, earmarking consumer-based fees to cover the cost of usage - like gas taxes for road construction and maintenance - is sound fiscal policy.
Sales taxes are regressive. Low income households spend a higher percent of income on taxable goods and services than higher income households.
High income households are able to save and invest. Saved or invested income is not subject to sales tax. A low income household typically pays 6.6 percent of its income in sales taxes.
A high income household may pay less than 1 percent of its income in sales taxes.
Utah's tax burden is the seventh highest in the nation. Utah's sales tax burden as a percent of personal income is 36% higher than the national average. Utah's tax burdens appear to be heading upward.
In addition to the statewide open space assessment, Weber and Davis counties are proposing a 0.1 percent arts and recreation tax and an additional 0.5 percent transit tax. State legislators are also considering 5 cent to 10 cent per gallon gas tax increases.
Urban open space preservation should be funded at the local level, indicated the independent public policy organization. Taxpayers in other Utah counties and towns should not be taxed to preserve open space in West Jordan or Park City.
If West Jordan and Park City want to preserve open space, the towns should use local tax dollars to accomplish the goal, concluded the independent public policy watchdog organization.