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Tax change impacts Wellington's coffers

Sun Advocate publisher

Joy Machinery has been a linchpin in the economy of the area for a long time.

The money the company pays in wages and property tax has been of significant value to the county and, since the Joy facility moved to Ridge Road, to Wellington city.

Another tax that was gathered since Joy has been in Wellington's boundaries is sales tax.

The company's sales tax has amounted to a large chunk of change for the city. However, the situation started to change last year.

In a last minute move at the 2007 general session of the Utah Legislature, an amendment was tacked onto a bill that removed a large part of the sales tax from mining machinery with a life of more than three years.

"We really didn't realize it until the numbers on our tax revenues started coming in," said Wellington Mayor Karl Houskeeper. "It hit us just the last half of 2008 that we could be in real trouble with this change."

Ken Powell, Wellington's city manager pointed out that the money from Joy has accounted for about 20 percent of the towns general fund.

"Our general fund last year was impacted by the exemption by about $94,100 in the last six months of 2008," stated Powell. "Joy accounts has been the largest retailer in town for some time and this is going to hurt if it continues."

Joy Machinery in Wellington is a regional facility providing longwall components, continuous miners, shuttle cars, feeder breakers and other equipment to mines in Utah, Colorado, New Mexico and Wyoming.

"We have already done some cutting by moving some money around," said Powell.

But things could get worse if the problem isn't solved.

"Our budget is mostly labor oriented," said Houskeeper. "When July 1 comes we could be looking at some real problems budget wise."

Utah District 69 Rep. Christine Watkins said during an interview that she is sponsoring a bill to remove the exemption.

The legislative calendar lists the bill as still in process and Watkins apparently needs a sponsor in the Utah Senate chambers to get the proposal passed.

In addition to Wellington, Orangeville and West Valley City are apparently feeling the sting of the exemption.

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