tag:blogger.com,1999:blog-268061522024-03-07T00:48:45.074-07:00Utah TaxpayerUtah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.comBlogger133125tag:blogger.com,1999:blog-26806152.post-33807419556073166722008-03-03T17:29:00.000-07:002008-03-03T17:31:12.582-07:00Founding staff skipping out on iProvo, UTOPIA<span style="font-size:130%;color:#000000;">Utah’s 2 largest municipal telecom systems are struggling to maintain their senior staff. UTOPIA’s founding executives—Paul Morris (Executive Director), Roger Black (COO) and David Shaw (General Counsel)—have all left in the last six months, and iProvo has failed to hire a telecommunications manager for more than a year. Filling these positions will prove challenging. Not only will these potential executives have to solve </span><a href="http://utahtaxpayer.blogspot.com/2007/11/utopias-financials.html"><span style="font-size:130%;color:#000000;">UTOPIA’s</span></a><span style="font-size:130%;color:#000000;"> and </span><a href="http://www.heraldextra.com/content/view/250913/"><span style="font-size:130%;color:#000000;">iProvo’s</span></a><span style="font-size:130%;color:#000000;"> persistent financial problems posting), but qualified and interested applicants will be few and far between.</span><br /><br /><span style="font-size:130%;color:#000000;">Centerville City Council member Paul Cutler and Orem City Manager Jim Reams have been hired as interim directors, but the UTOPIA board is actively seeking a new </span><a href="http://www.utopianet.org/"><span style="font-size:130%;color:#000000;">executive director and accountant</span></a><span style="font-size:130%;color:#000000;">. As with so many other aspects of UTOPIA’s life cycle, iProvo’s experience suggests serious problems. Initially a triumvirate of Kevin Garlick (Energy Director), Paul Venturella (Telecommunications Director) and Mary DeLaMare-Schaefer (Communications and Marketing Manager), were to run iProvo. Only Kevin Garlick remains. Venturella jumped ship in February 2007, and DeLaMare-Schaefer left in June 2007.</span><br /><br /><span style="font-size:130%;color:#000000;">For more than a year, iProvo has actively sought to hire a new </span><a href="http://www.provo.org/hr.telecom.html"><span style="font-size:130%;color:#000000;">telecommunications manager</span></a><span style="font-size:130%;color:#000000;">. The problems they’ve faced are so significant that Provo’s HR manager participated in an iProvo summit last December just to announce new strategies to fill this position. Another 3 months later, the position remains unfilled.</span><br /><br /><span style="font-size:130%;color:#000000;">Given the similarity of their services, there’s no doubt that they are competing with each other, and with the private sector, to fill these positions. And since iProvo’s job posting has already languished for more than a year, it’s hard to imagine that UTOPIA’s entry into the fray will make it any easier for either municipal telecom system to fill the position.</span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com0tag:blogger.com,1999:blog-26806152.post-64484648633550581032007-12-27T08:20:00.000-07:002007-12-27T08:39:55.188-07:00The cost of smaller class sizes<span style="font-size:130%;color:#000000;">Since the Legislative Auditor General released <a href="http://le.utah.gov/audit/07_14rpt.pdf">his report</a> on the funds the Legislature appropriated to reduce the average class size in Utah, the pundits have been wringing their hands. Apparently to everyone’s surprise and dismay, Utah class sizes are still the largest in the nation. For anyone even vaguely familiar with Utah, this audit only confirmed what we and many in the business community have said for years about Utah education: class size reduction is an unrealistic goal in Utah.<br /></span><br /><span style="font-size:130%;color:#000000;">The educational <a href="http://www.wested.org/policy/pubs/full_text/pb_ft_csr23.htm">merits</a> or <a href="http://edpro.stanford.edu/Hanushek/files_det.asp?FileId=148">demerits</a> of class size reduction have been debated for years. Parents intuitively prefer them, but the large scale tests of class size reduction show little improvement in student achievement unless average class size gets down to about 15. The cost of achieving that average class size would be monumental. And there are a host of other education proven reforms that would provide much larger gains in student achievement at a fraction of the cost.<br /></span><br /><span style="font-size:130%;color:#000000;">Utah’s average elementary class size is <a href="http://www.schools.utah.gov/finance/other/AnnualReport/07ar/Statistics/STAFF/Staff%20Ratios%20FY07.xls">26</a>. In addition, Utah classrooms will swell by more than <a href="http://www.schools.utah.gov/finance/other/AnnualReport/07ar/Statistics/STUDENTS/State_Enrollment_Projections.xls">160,000</a> over the next decade. On top of that, published reports indicate that Utah began the current school year with hundreds of vacant teaching slots.<br /></span><br /><span style="font-size:130%;color:#000000;">This teacher shortage means that Utah’s current average salary and benefits package of <a href="http://www.schools.utah.gov/finance/other/AnnualReport/07ar/Statistics/STAFF/salary%20&%20benefits%20FY07.xls">$55,034</a> per year is not attracting enough applicants to meet existing demand. Those vacant teaching positions, plus the others necessary to bring Utah’s average class size to 15, would be even more expensive. For illustration purposes, however, we’ll assume the cost only goes up to $60,000. That means Utah would have to spend another $516 million every year just to hire the 8,600 teachers necessary to get Utah class sizes down to 15.<br /></span><br /><span style="font-size:130%;color:#000000;">That calculation ignores the on-going surge in Utah enrollment. When the 160,000 new students hit Utah schools over the next 10 years, Utah will need another 6,222 elementary teachers to maintain an average class size of 15. Assuming the same $60,000 total compensation package for these teachers means Utah would pay $373.3 million for these teachers. All told, Utah would need to hire nearly 15,000 more teachers, at a total ongoing cost of $889 million.<br /></span><br /><span style="font-size:130%;color:#000000;">Add in the capital costs necessary for each of these teachers to have their own room, and the cost of reducing class size to 15 becomes staggering. As our October study, “<a href="http://www.utahtaxpayers.org/voucherstudy.pdf">Education Growth Projections in Utah: 2008-2022</a>,” showed, Utah taxpayers will have to purchase $6.365 billion in land and buildings to house the surge of students entering Utah schools. If reducing average class size to 15 requires the same proportional increase in capital costs as this analysis projects in salaries and benefits, those capital costs could easily exceed $10 billion.<br /></span><br /><span style="font-size:130%;color:#000000;">How much would meaningful class size reduction cost? This analysis shows we’d have to increase ongoing education spending by nearly $900 million per year. And our capital costs would dwarf that increase. Given class size reduction’s mixed record in raising student achievement and Utah’s unique demographics, class size reduction seems a fool’s errand.<br /></span><br /><span style="font-size:130%;color:#000000;">Would it be possible, even laudable to instead increase average teacher pay, and thereby attract the best and the brightest into Utah’s classrooms? When smaller class sizes are <a href="http://thinkexist.com/quotation/when-school-children-start-paying-union-dues-that/570022.html">what increase the number of teacher union dues payers</a>, don’t expect the unions to make teacher pay a higher priority than class size.</span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com0tag:blogger.com,1999:blog-26806152.post-87567872242850453992007-12-06T10:00:00.000-07:002007-12-06T10:04:18.336-07:00Why the Cottonwood Mall RDA is just plain wrong<span style="font-size:130%;color:#000000;">In our last post, we noted why the Cottonwood Mall RDA is such a risky gamble. In this post, we’ll describe why the Cottonwood Mall RDA isn’t just risky—it’s just plain bad policy.<br /><br />The proposed Cottonwood Mall RDA will not create one job, not one residence. Not one. <strong>Every square foot of retail and residential space General Growth Properties (GGP) plans on putting in this space will be built somewhere by someone without a subsidy.</strong> That’s because residential and retail development follows population and disposable income. Houses and retail developments will <strong>naturally</strong> go where people are and have money to spend. Subsidizing a developer to build residential or retail space in this place simply rearranges where this retail and residential space goes. In essence, GGP wants to take nearly $100 million—most of it from the Granite School District. In exchange, they’re not giving a single thing—because this retail and residential space will be done whether a subsidy is provided or not.<br /><br />Holladay says the revenue stream they are projecting amounts to “found” money. That is simply not true. Holladay City and GGP didn’t discover hundreds of thousands of dollars just waiting for a right-thinking “investor” to pick up. They want to steal this retail and residential development from another city, perhaps Taylorsville, South Salt Lake, West Valley City or Magna, and put it on their land.<br /><br />GGP says that this is the only project that will allow them to earn the kinds of returns on their investment that they expect, and even then they aren’t going to receive the double-digit return they typically aim for. That may be true—but <strong>should education taxes be used to subsidize GGP’s profits?</strong> We already spend less per student than any other state in the nation.<br /><br />GGP and Holladay say that this site will remain vacant, or nearly so, without this RDA. GGP has even gone so far as to say that without it, they’ll tear down the buildings, challenge the property valuation, just to reduce their tax liability. To a certain degree, they’re being disingenuous on this point: GGP told the Taxing Entities Committee (TEC) that they wouldn’t sell this property for the approximately $30 million the site is currently valued at, even if the RDA doesn’t go through. (We’ll return to this point in a minute.)<br /><br />We’re not engineers, so we’ll take their word when they say there are substantial infrastructure costs that have to be borne before that land can be built on. But to assume that no one will build on that site for the next 20 years is just absurd. As Holladay Mayor Dennis Webb noted at last Wednesday’s TEC meeting, the LDS Church is putting $1 billion into the City Center project without any taxpayer subsidies. GGP and Holladay city have noted that <strong>Larry Miller might be interested in building on that property. A big box retailer might go on that property. Both of these are plausible uses for that land, and neither of them would require an RDA.</strong><br /><br />Of course, GGP “doesn’t sell properties,” as they told the TEC last Wednesday. At least, not usually. However, they were quite clear that there are circumstances in which they have sold properties, and would sell this property. The fact that GGP has contemplated a price at which they wouldn’t sell the land means that there is a price at which GGP would sell the land. And for discussions of Larry Miller to mean anything, even as something Holladay would prefer to avoid, they have to mean that GGP would sell the land to Larry Miller, for the right price. In other words, <strong>GGP has no more interest in letting that land go undeveloped, giving them no return, than Holladay, Salt Lake County, or the Granite School District does.</strong><br /><br />Finally, let us point out that this RDA is just the first of 6 or 7 RDAs already in the pipeline that the Granite School Board will be asked to approve in the next several months. On Tuesday Taylorsville asked for another $15 million RDA. If the Granite School Board approves the Cottonwood Mall’s $100 million subsidy, how will they be able to oppose any of these other RDAs?<br /><br />RDAs can be an appropriate economic development tool. When cities use them to steal residential and retail development from each other, as Holladay is trying to do with this one, they are nothing but a drain on taxpayer dollars. <strong>This RDA creates no economic benefit, and will cost taxpayers and school kids tens of millions of dollars. We encourage the Granite School Board to vote no on the proposed Cottonwood Mall RDA.</strong></span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com1tag:blogger.com,1999:blog-26806152.post-82456498914170479742007-11-29T16:58:00.000-07:002007-11-29T17:00:19.360-07:00If all goes as planned . . .<span style="font-size:130%;color:#000000;">Holladay is proposing to subsidize retail activity and residential construction that will occur on its own in Salt Lake County even without a subsidy. Using tax dollars to stimulate this type of activity makes absolutely no sense: retail and residential construction respond to local demand, which is a function of population and disposable income. Taxpayers are the losers when cities use tax incentives to steal retail from each other. If this RDA is approved, the Legislature will have to once again consider reforming RDA statutes.</span><br /><br /><span style="font-size:130%;color:#000000;">Holladay Mayor Dennis Webb is the foremost cheerleader for the proposed Cottonwood Mall redevelopment. Under the proposal, over the next 20 years Holladay City, Salt Lake County and the Granite School District would give nearly $100 million—$70 million from the Granite School District alone—to General Growth Properties (GGP), the company who currently owns the Cottonwood Mall. In exchange, GGP will upgrade the current site with more than 1 million square feet of high-end retail and residential space.</span><br /><br /><span style="font-size:130%;color:#000000;">If all goes as planned, Holladay and GGP claim the city, Salt Lake County and the Granite School District will receive significantly more in property tax revenues when the project is finished, and a smaller increase in property tax revenues while the project is being completed. They’ll be taking those revenues from another city or another school district, but at least Holladay will be getting more property tax dollars. If all goes as planned.</span><br /><br /><span style="font-size:130%;color:#000000;">If, if, if. That darn “if” is a real pain. Every developer, every businessman has a different pain threshold. Some are willing to assume a greater risk for the potential of a bigger pay off; others are content to let lucrative deals pass by, because the potential loss would be too painful.<br /></span><br /><span style="font-size:130%;color:#000000;">When it comes to assessing those risks, elected officials aren’t quite as careful, at least when they aren’t using their own money. It’s not because they don’t care, or because they want to be cavalier with taxpayer dollars. But just as most people go bankrupt when playing Monopoly, elected officials’ pain thresholds are much higher when they’re using taxpayer dollars.<br /></span><br /><span style="font-size:130%;color:#000000;">The Cottonwood Mall redevelopment project is a perfect illustration. Located on major freeways, the Fashion Place and South Towne malls have replaced the Cottonwood Mall as preferred locations for national department stores like Dillards and Nordstrom. Unsurprisingly, this mall has lost all but one tenant; its parking lot is a shamble; and some of the most prized land in the Salt Lake valley has been almost vacant for some time.<br /></span><br /><span style="font-size:130%;color:#000000;">Before any upgrades can be done, GGP estimates $100 million of infrastructure work will be necessary to meet various flood plain, fill and other regulations created since the Cottonwood Mall was first built in 1962. GGP is willing to invest some $550 million into this project over the next 20 years; $650 million takes them past their pain threshold. That’s why they want Holladay, Salt Lake County and the Granite School District to put the last $100 million into the project. And if all goes as planned, what is now the Cottonwood Mall probably will be a residential community people aspire to live in. If all goes as planned.<br /></span><br /><span style="font-size:130%;color:#000000;">The question is, why should these taxpayer dollars be placed at risk? Why should education taxes from the Cottonwood redevelopment, which would have been used to pay teachers’ salaries on the west side of the Granite School District, be risked to build condos on the east side?<br /></span><br /><span style="font-size:130%;color:#000000;">And we can’t ignore the further risks inherent in the political world. Holladay was among several cities who considered splitting the Granite School District in half. They opted not to move forward this year, but it would be foolish to believe that the impetus for separation has disappeared. More likely, those who wanted to split Granite School District are just biding their time, waiting to see how the Jordan split goes. Can the Granite School District in good conscience let education taxes be placed at risk, with such a serious threat to their very existence looming?<br /></span><br /><span style="font-size:130%;color:#000000;">Public education advocates readily proclaim that Utah schools are woefully underfunded. If that’s so, how can they afford to risk these education tax dollars? Mayor Webb and GGP say the dollars aren’t at risk, that the increases in tax revenues are guaranteed. If there really isn’t a risk, why is GGP asking taxpayers to cough up $100 million in the first place? Why don’t they just put the last $100 million in themselves?<br /></span><br /><span style="font-size:130%;color:#000000;">Even if all does go as planned, this RDA would be a bad idea. That GGP sees a distinct possibility that it won’t go as planned makes this bad idea even worse. But that’s a topic for our next post.</span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com0tag:blogger.com,1999:blog-26806152.post-29331171274174827052007-11-26T11:07:00.000-07:002007-11-26T11:18:44.083-07:00UTOPIA'S FINANCIALS<span style="font-size:130%;color:#000000;">Rep. Urquhart and Jesse Harris have recently been discussing questions regarding the financial position of UTOPIA on their respective blogs, </span><a href="http://www.steveu.com/"><span style="font-size:130%;color:#000000;">www.steveu.com</span></a><span style="font-size:130%;color:#000000;"> and </span><a href="http://www.freeutopia.org/"><span style="font-size:130%;color:#000000;">www.freeutopia.org</span></a><span style="font-size:130%;color:#000000;">. Jesse Harris has focused on what he perceives as the dearth of public information on UTOPIA’s financial position. Fortunately, UTOPIA has published much of the data Rep. Urquhart is asking for. Given the dismal story the data tells, however, it’s not surprising UTOPIA doesn’t like to talk about it.</span><br /><br /><span style="font-size:130%;color:#000000;">UTOPIA’s original </span><a href="http://www.utopianet.org/docs/UTOPIA_Feasibility_Report.pdf"><span style="font-size:130%;color:#000000;">feasibility study</span></a><span style="font-size:130%;color:#000000;"> projected that they would receive an average revenue per user (ARPU) of $58 (page 16). Page 29 of the same feasibility study anticipates that a take rate of less than 20% would jeopardize the $10.1 million annual sales tax pledges from member cities. Over the 20 years of the UTOPIA bonds, that means UTOPIA pledging members would have to pay $202 million.</span><br /><br /><span style="font-size:130%;color:#000000;">During their June 2007 board meeting, UTOPIA’s representatives shared the current state of their finances. Page 2 of their 2007 financials show them with 6,493 customers, and $2.25 million in revenue. (Curiously, UTOPIA still hasn’t published that data </span><a href="http://www.utopianet.org/what/agency/records.html"><span style="font-size:130%;color:#000000;">online</span></a><span style="font-size:130%;color:#000000;">, though they did email these financials when Utah Taxpayers Association asked for it.) That means for 2007 their ARPU was just $29, or half of what they were projecting.</span><br /><br /><span style="font-size:130%;color:#000000;">In a recent presentation to the Cottonwood Heights City Council, UTOPIA described their current take rate, both on a system-wide basis, and city by city. On slide 16, UTOPIA indicates that their current system-wide take rate is 16.4%. With their take rate below the break even threshold, and their ARPU just half of what their feasibility study projected, UTOPIA’s financial position seems precarious at best.</span><br /><br /><span style="font-size:130%;color:#000000;">Their 2007 financial summary raises other serious questions. While they anticipated receiving $5.25 million in fees from subscribing members, their amended budget shows them only receiving 1/3 that amount, or $1.75 million. Similarly, they projected that they would spend $9.0 million in network operations, but their amended budget shows them spending just half that amount, $4.3 million. </span><br /><br /><span style="font-size:130%;color:#000000;">The combination of much lower-than-projected subscriber revenue and much lower-than-projected expenses for network operations suggests that UTOPIA didn’t attract anywhere near the number of retail customers as they anticipated. In all of these cases, UTOPIA made much rosier projections than actual experience justifies. In testimony before the Legislature’s Government Competition and Privatization Subcommittee, UTOPIA general counsel David Shaw explained the dissonance between their projections and reality as the product of “externalities.” Perhaps a better word would be “competition.” Given this dissonance, the Legislature can and should ask whether UTOPIA is a going concern. If they aren’t, it’s hard to see why they should be allowed to expand.</span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com10tag:blogger.com,1999:blog-26806152.post-67455321123402221732007-09-17T13:18:00.000-06:002007-09-17T21:14:21.160-06:00State employee retirement: 30% or 100% taxpayer funded?<span style="font-size:130%;color:#000000;">Utah state and local government employees, including school district employees, receive generous retirement benefits. Utah taxpayers cover 100% of the cost of state/local government employee retirement benefits (some employees on the older system chip in some of their own funding).</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">However, the Utah Public Employees' Association claims differently. In their August/September 2007 newsletter, the UPEA states </span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;"><em>Contributions into the retirement system are only funding 30% of the cost; 70% of the cost of the retirement system is funded by investment earnings. Put another way, for every $1 of benefit paid out by [Utah Retirement System], only 30 cents is being funded by the employer (taxpayer).</em></span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">Obviously, we disagree. The other 70% should also be considered taxpayer funded as well since investment earnings are derived from taxpayer contributions in the first place. This is no different than the investment earnings that individuals and households earn in their own retirement accounts. The earnings are attributed to the investor's account.</span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com2tag:blogger.com,1999:blog-26806152.post-83994503571712615262007-09-06T18:09:00.000-06:002007-09-06T18:47:28.509-06:00Charter Schools Still Receive Less Funding Per Student than District Schools<span style="font-size:130%;color:#000000;">In its September 2007 </span><a href="http://www.utahtaxpayers.org/NEWSLTTR/PDFs/2007/sep07.pdf"><strong><span style="font-size:130%;color:#990000;">newsletter</span></strong></a><span style="font-size:130%;color:#000000;">, the Utah Taxpayers Association has released an analysis of per student spending for district schools and charter schools for FY2006. </span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">After excluding lunch service and non K-12 programs and deducting transportation costs and federal start-up funding, charter schools received $5,329 per student in FY2006 while district schools received $6,001.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">While some of the per student funding difference between charter schools and district schools is attributable to different enrollment demographics, more than half of the difference is attributable to charter schools being short-changed on local replacement funding.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">Click </span><a href="http://www.utahtaxpayers.org/NEWSLTTR/PDFs/2007/sep07.pdf"><strong><span style="font-size:130%;color:#990000;">here</span></strong></a><span style="font-size:130%;color:#000000;"> to see the report.</span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com0tag:blogger.com,1999:blog-26806152.post-60616724592749086022007-09-02T21:23:00.000-06:002007-09-03T14:04:54.725-06:00Fees + Taxes = Double Taxation?<span style="font-size:130%;color:#000000;">Today's <a href="http://deseretnews.com/article/1,5143,695206227,00.html"><strong><span style="color:#990000;">Deseret Morning News</span></strong> </a>reports on the increased reliance on entrance fees to fund national and state parks. One of the persons quoted in the article suggested that having to pay taxes <em>and</em> fees is the same as paying twice.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">We've heard the same argument with regards to congestion pricing. Such "paying twice" or "double taxation" reasoning leads to some very interesting conclusions.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">For example, should cities stop sending residents monthly water bills because federal taxes, state sales taxes, and local property taxes are used to fund water projects?</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">Should the state eliminate the gas tax (really a user fee) because state and local general sales tax dollars and local property tax dollars are used to fund roads?</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">Should the state stop charging for lunches in public schools because federal taxes and state liquor taxes are used to fund school nutrition programs?</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">It's fairly obvious to most people that if government were to eliminate these fees that general taxes would have to be raised elsewhere or government programs would have to be streamlined (including those that were being funded in part by fees).</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">However, the real question to those who argue that these fees are double taxation is why do government services have to be either 100% funded by general taxes or 100% funded by fees but not a combination of both?</span><br /><span style="font-size:130%;"></span><br /><span style="font-size:130%;color:#000000;">Reliance on user fees makes sense in many instances, particularly if user fees encourage personal responsibility and more efficient use of resources.</span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com5tag:blogger.com,1999:blog-26806152.post-39350663919593979112007-08-28T01:08:00.000-06:002007-08-28T01:17:14.217-06:00Utah's Toothless Spending Limit<span style="font-size:130%;color:#000000;">The Utah Taxpayers Association's August newsletter has an article on pages 3 and 4 that explains Utah's spending limit and why it is ineffective at slowing government spending growth. </span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">In FY2008, total expenditures from the general and education funds (including earmarks) increased by 18.3%. The actual increase will be even higher once FY2008 supplementals are determined in the next legislative session.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">The spending limit is ineffective because most government spending is exempt from the limit. In FY2008, only 39.7% of combined education/general fund expenditures (including earmarks) will be subject to the spending limit.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">Click <a href="http://www.utahtaxpayers.org/NEWSLTTR/PDFs/2007/aug07.pdf"><span style="color:#990000;"><strong>here</strong></span></a> to read the article on pages 3 and 4.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;"></span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com2tag:blogger.com,1999:blog-26806152.post-60576804366457871332007-08-21T19:25:00.000-06:002007-08-21T22:07:50.493-06:00Following up on $7,500 per student in FY2008<span style="font-size:130%;color:#000000;">We’ve received some questions about our $7,500 per Utah K-12 student spending estimate for FY2008. Click <a href="http://utahtaxpayer.blogspot.com/2007/08/7500-per-utah-k-12-student-in-fy2008.html"><strong><span style="color:#990000;">here</span></strong></a> to see the original post. Here are our answers to the questions we’ve received.<br /><br /><strong>Does your $7,500 estimate include “one-time” money?<br /></strong>Yes it does, as it should. Those who want to minimize the amount taxpayers spend per student try to exclude all sorts of things, such as facility construction, interest, “below the line” items such as Social Security, Medicare, retirement, block grants etc. Now, some want to exclude so-called “one-time” expenditures.<br /><br /><strong>Here’s why one-time expenditures should be included</strong><br /><br />- One-time expenditures are still expenditures of tax dollars. These are real tax dollars, not pretend tax dollars.</span><br /><span style="font-size:130%;color:#000000;"><br />- One-time expenditures will be replaced in succeeding years by additional one-time revenues or by ongoing revenues.<br /><br />- To exclude one-time expenditures would be to assume that per student spending will be DECREASING in FY2009 because the one-time money would not be replaced. History strongly indicates that FY2009 spending per student – which will also include one-time funds -- will be even higher than FY2008. Only once in the past twenty years has nominal per student spending decreased from one year to the next.<br /><br />- If these one-time expenditures had been diverted to higher education which would have then diverted general funding to transportation, then the opposition would not be dismissing these expenditures as “one-time”.<br /><br />- One-time expenditures in the Minimum School Program are less than 4% of estimated school district expenditures in FY2008. Therefore to reach $7,500 per student in FY2009, the legislature would have to add an additional 3% for enrollment growth and 4% to replace one-time funding.<br /><br />- All budgets have one-time money. A lot of the current one-time money is from budget surpluses, and these budget surpluses are the result of conservative revenue estimates by the state. If the state were less conservative in estimating revenue, then a lot of the one-time money in the FY2008 budget would automatically become ongoing money. During recessions, one-time money comes from transfers from the Rainy Day Fund and the “working” Rainy Day Fund (cash for capital projects).<br /><br /><strong>What about federal money?<br /></strong>Our estimate includes federal money, as it should. Afterall, Utahns pay federal taxes just like everyone else. A voucher program that results in educating students at a lower cost to federal taxpayers makes sense just as a voucher program that educates students at a lower cost to state and local taxpayers.<br /><br />Besides, most federal dollars are driven by poverty levels. Therefore, if voucher opponents are going to argue that vouchers are going to result in “loss” of federal dollars, then they must be assuming that low income students will be using vouchers. Besides, federal dollars for K-12 education are generally allocated to the states based on Census Bureau poverty levels.</span><br /><span style="font-size:130%;color:#000000;"><br /><strong>What about adult education?</strong><br />No, our estimate does not include adult education or fund 23 expenditures. Even though these are tax dollars, this would not be an appropriate inclusion in the voucher debate.<br /><br /><strong>In the context of the voucher debate, how much of these costs are variable?</strong><br />Considering that Utah’s enrollment is expected to grow 3% annually, virtually all K-12 costs are variable. There are no fixed costs associated with teachers that have not yet been hired, buildings that have not yet been built, or equipment that has not yet been purchased. Even districts that have experienced declining enrollment have demonstrated that costs are largely variable by redrawing school boundaries. They can also convert underused traditional district schools to charter schools.</span><br /><br /></span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com0tag:blogger.com,1999:blog-26806152.post-22769786956168707262007-08-16T23:34:00.000-06:002007-08-17T00:39:47.863-06:00Property taxes, part 4: is Truth-in-Taxation harmful to local governments?<span style="font-size:130%;color:#000000;">Opponents of Truth-in-Taxation (TNT) argue that TNT harms local governments because the calculation of the certified tax rate does not include inflationary adjustments. To offset inflationary losses, local government must go through Truth-in-Taxation periodically.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">As we explained in <a href="http://utahtaxpayer.blogspot.com/2007/08/property-taxes-part-3-truth-in-taxation.html"><strong><span style="color:#990000;">part 3</span></strong></a>, property tax revenue growth since TNT's enactment has been nearly identical with inflation and population growth. When property tax reductions unrelated to TNT are accounted for -- two legislative reductions in the statewide basic levy for education and a reduction in county property taxes in exchange for county authority to impose a 0.25% sales tax -- property tax revenues have increased slightly faster than inflation and population growth. </span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">Property tax revenues would be even higher (or property tax rates for everyone would be lower while local governments would be getting the same amount of revenue they are currently receiving) if cities would stop using RDAs to subsidize locally-driven retail, recreation, and entertainment. Subsidizing economic activity that would occur on its own somewhere in Utah without a subsidy is poor fiscal policy. Hopefully, recent RDA reform will change this.</span><br /><span style="font-size:130%;color:#000000;"></span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com0tag:blogger.com,1999:blog-26806152.post-76789514629361685692007-08-13T00:52:00.000-06:002007-08-13T01:06:03.176-06:00Property Taxes, Part 3: Truth-in-Taxation Results<span style="font-size:130%;color:#000000;">We’ve discussed the theory and mechanics behind Truth-in-Taxation in parts 1 and 2. Now we’ll talk about the results.<br /><br /><strong>Property tax revenue growth before and after Truth-in-Taxation</strong><br />In the six years (1980 to 1986) prior to Truth-in-Taxation’s enactment, property tax revenue grew at a 10.8% annualized rate even though combined inflation and population growth was about 7%<br /><br />In the twenty years since Truth-in-Taxation, property tax revenues have grown at a 5.4% rate, equal to the combined inflation and population growth rate of 5.4%.<br /><br />During that time period, there were three property tax cuts unrelated to Truth-in-Taxation – two reductions to the statewide basic levy for education and a reduction in county property taxes in exchange for a sales tax increase. All of these reductions occurred prior to 2000 so comparing property tax growth since 2000 would provide a more accurate impact of Truth-in-Taxation. Since 2000, property tax revenues have grown at about 5.9% annually, and combined inflation and population growth has been slightly lower at 5.5%. Relative to inflation and population growth, property taxes have grown at a much slower rate since Truth-in-Taxation’s enactment than before.<br /><br /><strong>Utah’s property tax burdens compared to other states<br /></strong>Utah’s major sources of tax revenues are individual income, sales, property, motor fuel taxes, and fees. Of these, Utah is below the national average on property taxes only.<br /><br />- Individual income taxes: Utah ranks 16th highest at 2.94% of total personal income (TPI) compared 2.41% for the U.S.<br /><br />- General sales taxes: Utah ranks 13th highest at 3.33% of TPI compared to 2.63% for the U.S.<br /><br />- Motor fuel taxes: Utah ranks 10th highest at 0.54% of TPI compared to 0.36% for the U.S.<br /><br />- Property taxes: Utah ranks 36th highest at 2.73% of TPI compared to 3.36% for the U.S.<br /><br />For a complete report on Utah’s state/local tax and fee burden in FY2005, click [<a href="http://www.utahtaxpayers.org/annual_reports/HUC%20FY2007%20write%20up.pdf"><strong><span style="color:#990000;">here</span></strong></a>] to see the Utah Taxpayers Association’s How Utah Compares report. The association updates this report annually. </span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com3tag:blogger.com,1999:blog-26806152.post-80543355751333002962007-08-08T21:45:00.000-06:002007-08-09T14:38:56.776-06:00$7,500 per Utah K-12 student in FY2008?<span style="font-size:130%;color:#000000;">The Utah Taxpayers Association estimates that taxpayers will be spending more than $7,500 per student in FY2008. This figure includes operations, facility construction, and interest. It does not include non-K-12 programs.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;"><strong>Isn't this higher than the Census Bureau figure?</strong></span><br /><span style="font-size:130%;color:#000000;">The most current Census Bureau spending per student figure for Utah is $5,257 for FY2005, not FY2008. The $7,500 figure is for FY2008, and it includes expenditures that the Census Bureau does not include.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">This Census Bureau figure excludes facility construction and interest. The Utah Taxpayers Association's figure (actual, not estimated) for FY2005 <em>excluding</em> facility construction and interest is $5,300, which is within 1% of the equivalent Census Bureau figure.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">Including facility construction and debt service, the association calculates that Utah spent $6,309 per student in FY2005 (again, actual not estimated).</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;"><strong>How did we get to an estimated $7,500 per student for FY08?</strong></span><br /><span style="font-size:130%;"><span style="color:#000000;">The association recently released its Utah School District Spending Report for FY2006. You can view this report </span><a href="http://www.utahtaxpayers.org/annual_reports/schlcomp/schoolspending2006.pdf"><strong><span style="color:#990000;">here</span></strong></a><span style="color:#000000;">. The spending figures in this report are actual expenditures, not estimates. In FY2006, Utah school districts spent $6,529 per student. Again, this includes facility construction and interest.</span></span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">The actual figures for FY2008 won't be available for another 18 months, but we can safely estimate that FY2008 per student spending in Utah will be at least $7,500 because the increase in Minimum School Program (MSP) spending per student from FY2006 to FY2008 is about $1,000. Adding the MSP increase to the FY2006 actual expenditure yields more than $7,500 per student for FY2008. This is a conservative estimate because it assumes that facility construction, interest, and non-MSP operating costs per student will not increase from FY2006 to FY2008.</span><br /><span style="font-size:130%;"></span><br /><span style="font-size:130%;color:#000000;">By the way, facility construction and interest are not fixed costs in a state where enrollment is projected to grow by about 3% annually for at least the next decade. There are no fixed costs associated with buildings that have not yet been built. As long as Utah is expected to experience enrollment growth of about 3% annually, Utahns can expect to continue spend more than a $500 million per year on facility construction and interest. </span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">However, Utahns can spend less if vouchers divert a portion of enrollment growth to private schools at a lower cost per student.</span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com5tag:blogger.com,1999:blog-26806152.post-89256755371110615932007-08-07T22:22:00.000-06:002007-08-07T22:24:21.019-06:00Throwing kids together?<p><span style="font-size:130%;color:#000000;">Kim Burningham is turning to the age-old canard of “diversity,” a common theme among voucher opponents. As he notes in yesterday’s </span><a href="http://www.sltrib.com/ci_6553716"><span style="font-size:130%;color:#000000;">Salt Lake Tribune</span></a><span style="font-size:130%;color:#000000;">, “We are best served by schools that throw children together. . . . One of our greatest faults as a society is that we have become fragmented. Separation is not to be encouraged.” While that theme is laudable, it’s hard to see how the school system he has overseen for 8 years fulfills that mandate.</span></p><p><span style="font-size:130%;color:#000000;">According to the Civil Rights Project, a joint project of Harvard University and UCLA, Utah’s public schools are among the most racially segregated in the country. As the table below, extracted from page 22 of their 2006 report, “</span><a href="http://www.civilrightsproject.ucla.edu/research/deseg/Racial_Transformation.pdf"><span style="font-size:130%;color:#000000;">Racial Transformation and the Changing Nature of Segregation</span></a><span style="font-size:130%;color:#000000;">,” indicates, Utah public schools are more racially isolated than all of our neighboring states except Idaho. (And no one points to any state in the intermountain west as a bastion of racial integration.)</span></p><table cellspacing="0" cellpadding="0"><span style="font-size:130%;color:#000000;"></span><tbody><tr><span style="font-size:130%;"><br /><span style="color:#000000;"></span></span><td valign="bottom" width="288" colspan="6"><p><strong><span style="font-size:130%;color:#000000;">Percent of Students in Multiracial Schools by Race, 2003-04 </span></strong></p></td></tr><tr><td valign="bottom" width="48"><span style="font-size:130%;color:#000000;"></span></td><td valign="bottom" width="48"><p><strong><span style="font-size:130%;color:#000000;">%White in </span></strong></p></td><td valign="bottom" width="48"><p><strong><span style="font-size:130%;color:#000000;">%Black in </span></strong></p></td><td valign="bottom" width="48"><p><strong><span style="font-size:130%;color:#000000;">%Latino in</span></strong></p></td><td valign="bottom" width="48"><p><strong><span style="font-size:130%;color:#000000;">%Asian in </span></strong></p></td><td valign="bottom" width="49"><p align="center"><strong><span style="font-size:130%;color:#000000;">%American Indian in</span></strong></p></td></tr><tr><td valign="bottom" width="48"><p><strong><span style="font-size:130%;color:#000000;">State </span></strong></p></td><td valign="bottom" width="48"><p align="center"><strong><span style="font-size:130%;color:#000000;">Multiracial School </span></strong></p></td><td valign="bottom" width="48"><p align="center"><strong><span style="font-size:130%;color:#000000;">Multiracial School </span></strong></p></td><td valign="bottom" width="48"><p align="center"><strong><span style="font-size:130%;color:#000000;">Multiracial School </span></strong></p></td><td valign="bottom" width="48"><p align="center"><strong><span style="font-size:130%;color:#000000;">Multiracial School </span></strong></p></td><td valign="bottom" width="49"><p align="center"><strong><span style="font-size:130%;color:#000000;">Multiracial School </span></strong></p></td></tr><tr><td valign="bottom" width="48"><p><span style="font-size:130%;color:#000000;">Utah </span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">2</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">14</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">14</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">21</span></p></td><td valign="bottom" width="49"><p align="center"><span style="font-size:130%;color:#000000;">5</span></p></td></tr><tr><td valign="bottom" width="48"><p><span style="font-size:130%;color:#000000;">Nevada</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">43</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">74</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">58</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">69</span></p></td><td valign="bottom" width="49"><p align="center"><span style="font-size:130%;color:#000000;">33</span></p></td></tr><tr><td valign="bottom" width="48"><p><span style="font-size:130%;color:#000000;">Colorado</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">11</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">54</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">16</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">26</span></p></td><td valign="bottom" width="49"><p align="center"><span style="font-size:130%;color:#000000;">29</span></p></td></tr><tr><td valign="bottom" width="48"><p><span style="font-size:130%;color:#000000;">Arizona</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">11</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">27</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">14</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">17</span></p></td><td valign="bottom" width="49"><p align="center"><span style="font-size:130%;color:#000000;">21</span></p></td></tr><tr><td valign="bottom" width="48"><p><span style="font-size:130%;color:#000000;">Idaho</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">1</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">0</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">2</span></p></td><td valign="bottom" width="48"><p align="center"><span style="font-size:130%;color:#000000;">1</span></p></td><td valign="bottom" width="49"><p align="center"><span style="font-size:130%;color:#000000;">10</span></p></td></tr></tbody></table><br /><p><span style="font-size:130%;color:#000000;">By this measure, Utah public schools are hardly “throwing students together,” to use Mr. Burningham’s phrase. Given the way public schools are <em>designed</em> to stratify along economic lines, that’s hardly a surprise. The wealthy and affluent people buy houses near each other, because they can, while the rest of the community lives in the nicest neighborhood they can afford. Then public schools mimic this economic segregation by using geographic boundaries to dictate who attends which schools.</span></p><p><span style="font-size:130%;color:#000000;">Before the complaints are lodged, we’ll clarify. We support the wonderful work Utah public schools do. They do and always will educate the vast majority of Utah students, because most Utah families are very pleased with the hard work they perform. However, it is disingenuous at best for Mr. Burningham, or any representative of Utah public schools, to criticize vouchers on the grounds of segregation, diversity or some other racial codeword. Hard geographic boundaries like those used in public schools are hardly the model for achieving it.</span></p>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com5tag:blogger.com,1999:blog-26806152.post-21923620828760574002007-08-06T15:53:00.000-06:002007-08-06T16:44:37.609-06:00What is Hogle Zoo Hiding?<span style="font-size:130%;color:#000000;">Hogle Zoo is asking the Salt Lake County Council to place a $65 million bond before the voters this November. Although the Zoo’s bond is nearly TWICE the size of the $35 million Real S.L. stadium subsidy, their proposal has faced little scrutiny. A scant 5 years ago, the Legislative Auditor General found serious lapses in the Zoo Board’s judgment. Voters should wonder whether the use of the $65 million bond will be appropriate.<br /><br /></span><p><span style="font-size:130%;color:#000000;">To better understand whether the Zoo Board’s judgment has improved, on July 13 the Utah Taxpayers Association submitted a GRAMA request with the following questions deriving from the Audit.</span></p><ol><li><span style="font-family:times new roman;font-size:130%;color:#000000;">What is the relationship between the Audit's recommendation regarding the elephant moat, and the elephant water tank the Zoo recently built? </span></li><li><span style="font-family:times new roman;font-size:130%;color:#000000;">What is the current size of the Zoo (in acres)? </span></li><li><span style="font-family:times new roman;font-size:130%;color:#000000;">What is the annual capacity of the parking at the Zoo? </span></li><li><span style="font-family:times new roman;font-size:130%;color:#000000;">How many on-site parking stalls does the Zoo have?<br />How many off-site parking stalls does the Zoo have?</span></li><li><span style="font-family:times new roman;font-size:130%;color:#000000;">Please provide the names and contact information for every member of the Zoo’s Board from 2002 to the present.</span></li><li><span style="font-family:times new roman;font-size:130%;color:#000000;">What outside contracts has the Zoo let since the 2002 audit? </span></li><li><span style="font-family:times new roman;font-size:130%;color:#000000;">Who won the outside contracts let by the Zoo since the 2002 audit?</span></li><li><span style="font-family:times new roman;font-size:130%;color:#000000;">What is the relationship between the Zoo's Board members and the winners of these contracts? </span></li><li><span style="font-family:times new roman;font-size:130%;color:#000000;">What kind of competitive bid process has the Zoo Board used in evaluating various contract proposals? </span></li><li><span style="font-family:times new roman;font-size:130%;color:#000000;">What is the Zoo Director’s total compensation package, including salary, home and auto?</span></li><li><span style="font-family:times new roman;font-size:130%;color:#000000;">How does the Director's total compensation package (salary, home and auto) compare with that of directors at zoos of similar size and who have similar tenure? </span></li><li><span style="font-family:times new roman;font-size:130%;color:#000000;">What procedures has the Zoo put in place to independently track how ZAP funds and state appropriations are tracked?</span></li></ol><p><span style="color:#000000;"><span style="font-size:130%;"><span style="font-family:times new roman;">Despite </span>annually receiving approximately $1.4 million dollars from the state, and more than $500,000 from the Salt Lake County ZAP Tax, the Zoo Board refused our GRAMA request. The Zoo Board did provide the material they supplied Salt Lake County’s Debt Review Committee and the Salt Lake County Council. This material answers several of our questions; however, they failed to answer others. Our first question is perhaps the most surprising. The 2002 Audit questions whether the elephant moat creates a potential hazard for the elephants. Since then, the Zoo built an elephant water tank, where the elephants could safely play in the water.</span></span></p><p><span style="font-size:130%;color:#000000;">This question stems from conversations with current and former Zoo board members, who say that elephants only play in water if trained from infancy to do so. Although these current and former Zoo board members have told us no Hogle Zoo elephant has even gotten in this elephant water tank, the Zoo board did not respond to this question.</span></p><p><span style="font-size:130%;color:#000000;">Several questions focused on issues the Auditors raised about the suitability of the Zoo’s current site. For several years the Zoo examined the possibility of either expanding into undeveloped portions of This Is The Place Heritage Park, or relocating to another part of the Salt Lake Valley. Although the Auditors found that Hogle Zoo’s current site would be at capacity in just 8 years, the Board rejected both of those options, and is now pressing for a 20 year bond to improve the current site.</span></p><p><span style="font-size:130%;color:#000000;">Finally, the Zoo’s response suggested at least one more question. On May 22, 2007, the Zoo told the Salt Lake County Council, “The Zoo operates without debt.” In reality, they operate on the debt carried for them by other taxing entities, such as the $10 million bond Salt Lake City approved for the Zoo in 2003, and now the $65 million bond they want from Salt Lake County.</span></p><p><span style="font-size:130%;color:#000000;">We hope the County Council requires the Zoo to answer these pressing questions before they vote. To gloss them over when so much is at stake is entirely inappropriate.</span></p>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com0tag:blogger.com,1999:blog-26806152.post-60747776446617246592007-08-01T21:46:00.000-06:002007-08-01T21:56:32.892-06:00Property Taxes, Part 2: why did my taxes go up?<span style="font-size:130%;color:#000000;">Generally, when property valuations increase, property tax rates decrease to maintain revenue neutrality (excluding new growth). This revenue-neutral rate is called the certified tax rate. This rate is then applied to all properties, including new residential and commercial developments. Increased valuations due to new developments do not reduce the property tax rate<br /><br />Despite Truth-in-Taxation’s ratcheting down of property tax rates as valuations of existing properties increase, sometimes property owners see a higher property tax bill. Sometimes, property owners see a decrease. There are several reasons why.<br /><br /><strong>Property valuations increase faster in one area than in other areas<br /></strong>Property valuations can increase faster in some areas than in other areas for two reasons. First, properties are periodically reassessed. As a result, properties that were recently reassessed by the county will typically experience larger valuation increases than properties that were not reassessed recently. Second, real estate market demand may push up the value of some properties faster than others.<br /><br />Using yesterday’s example, if existing property valuations increase 20% county-wide, the tax rate is reduced by 16.7% to maintain revenue neutrality (excluding new growth). However, properties that increased faster than the county (and/or school district/city/special service district) average will experience an increase in property taxes while others will experience a decrease. In the end, it all works out because other parts of the county and school district will be reassessed in following years and their taxes will increase while everyone else’s decreases.<br /><br /><strong>Local governments issue or retire voter approved general obligation bonds<br /></strong>A local government’s property tax rate is a sum of several tax levies. In most cases, one of the property tax levies is used to pay off voter-approved general obligation (GO) bonds. These debt service levies are NOT subject to Truth-in-Taxation. Therefore, if a local government issues a voter approved bond, property taxes may increase even though the local government’s other levies were reduced by the Truth-in-Taxation process.<br /><br />When a local government retires a GO bond, the debt service levy is reduced (unless the local government issues new debt).<br /><br /><strong>Local government raises taxes</strong><br />Truth-in-Taxation does not prevent local governments from raising taxes. Once the certified tax rate has been calculated by the Utah State Tax Commission, local governments have the option of exceeding the certified tax rate. When local governments decide to exceed the certified tax rate, they must go through the Truth-in-Taxation notification and hearing process. Annually, about half of school districts increase their rates above the certified tax rate, and about 20% of counties and 5% to 10% of cities increase their rates above the certified tax rate.</span><br /><span style="font-size:130%;"></span><br /><span style="font-size:130%;color:#000000;">Certified tax rates do not include adjustments for inflation. Therefore, local governments occasionally increase property tax rates to recoup inflationary losses. Sometimes, the proposed increases do more than offset inflation, sometimes less.</span><span style="color:#000000;"><br /></span><span style="color:#000000;"><span style="font-size:130%;"><br /><strong>Local government imposes judgment levy<br /></strong>Occasionally, large taxpayers successfully appeal their property valuations, just as home owners successfully appeal their property valuations. In some cases, these large taxpayer appeals take several years to resolve. When that happens, the local governments must refund the property tax overpayment from previous years. In such situations, local governments have the option of imposing a one-time judgment levy to cover the costs of the tax refund. In these cases, property taxes may increase even though Truth-in-Taxation has reduced other levies.<br /><br />Residential appeals, on the other hand, are generally resolved quickly, which means that refunds of multi-year overpayments are not an issue for residences.<br /><br /><strong>Other factors: BOE adjustments, delinquent taxpayers, centrally assessed properties<br /></strong>Just as local governments are allowed to impose one-time judgment levies to cover costs of refunding previous years’ overpayments to large taxpayers, tax rates are increased when any property owner successfully appeal current-year property taxes. This adjustment is called the board-of-equalization (BOE) adjustment. This increases the certified tax rate.<br /><br />Every year, some property owners do not pay their property taxes, usually due to financial hardships. (Note: property owners are required to pay their taxes even when they appeal.) When this happens, tax rates increase to hold local governments harmless. Local governments actually benefit from delinquent property owners since the tax rate increases when taxes are delinquent but tax rates do not decrease when delinquent taxes are eventually paid (which is always the case since such properties are sold by the county and back taxes are collected at that point.)<br /><br />BOE (3-year moving average) and collection (5-year moving average) adjustments do not change much from year to year, especially in large taxing entities like school districts and counties. However, in small cities/towns and special service districts, a couple of delinquent taxpayers or successful property tax appeals can increase the certified tax rate for all taxpayers.<br /><br />We’ll talk about centrally assessed property in a later post.<br /><br /></span><br /></span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com2tag:blogger.com,1999:blog-26806152.post-90359761384476775592007-07-31T20:57:00.000-06:002007-07-31T21:14:10.683-06:00Property Taxes, Part 1: How Truth-in-Taxation Works<span style="font-size:130%;color:#000000;">Truth-in-Taxation is Utah’s most taxpayer-friendly law. It’s even better than California’s Prop 13 (more about that in a later post).<br /><br /></span><span style="color:#000000;"><span style="font-size:130%;"><strong>How does Truth-in-Taxation (TNT) work?<br /></strong>TNT is a revenue-driven system, not a rate-driven system. Generally, as valuations of existing property increase, property tax rates decrease. This automatic reduction in property tax rates prevents local governments from getting a windfall simply because valuations have increased.<br /><br />For example, if valuations of existing property increase by 20%, the property tax rate decreases by 16.7% to maintain revenue neutrality as demonstrated by the following equation:<br /><br /><span style="font-size:100%;">(100% + 20%) * (100% - 16.7%) = 100% of original tax = no change<br /></span><br />The reduced property tax rate is known as the certified tax rate (CTR). This rate is then applied to all property, including “new growth”. While local governments receive increased revenues due to new growth, TNT includes no automatic adjustment for inflation. </span></span><br /><span style="color:#000000;"><span style="font-size:130%;"></span></span><br /><span style="color:#000000;"><span style="font-size:130%;">If local governments want to adjust for inflation (or more, or less), they go through TNT notification and hearing process. This is a good opportunity to for local government officials to explain the proposed budget to their constituents.<br /><br />For the record, the Utah Taxpayers Association does not oppose every proposed increase over the certified tax rate. In many cases, local governments are recouping inflationary losses. Certainly, that is not always the case. In Part 7, we’ll talk more about that.<br /><br /><strong>Other notes</strong><br />- Automobile Fee-in-Lieu and semiconductor personal property revenues are excluded from CTR calculation</span></span><br /><span style="color:#000000;"><span style="font-size:130%;"><br />- RDA increments are excluded from CTR calculations (as increment becomes taxable, it is treated as new growth)<br /><br />Tomorrow, we’ll discuss some of the other factors that impact the certified tax rate and why your property taxes may have increased in spite of Truth-in-Taxation. </span></span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com0tag:blogger.com,1999:blog-26806152.post-79165246328109251802007-07-30T22:31:00.000-06:002007-07-30T23:42:18.931-06:00Explaining your property taxes<span style="font-size:130%;color:#000000;">If you own property in Utah, you have most likely received a "notice of property valuation and tax change" from your county. Nearly everyone's property has increased dramatically. (Don't get too giddy about that because the value of your next house has increased by about the same percentage.)</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">In the next two weeks, we will be discussing property taxes with emphasis on Truth-in-Taxation. The Utah Taxpayers Association lobbied very aggressively for Truth-in-Taxation in the 1980s and continues to defend it every year.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">This six-part series will cover the following:</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">1. How does Truth-in-Taxation work?</span><br /><span style="font-size:130%;color:#000000;">2. Why did my property taxes go up (or down)?</span><br /><span style="font-size:130%;color:#000000;">3. What have been the results of Truth-in-Taxation?</span><br /><span style="font-size:130%;color:#000000;">4. Does Truth-in-Taxation hurt local governements?</span><br /><span style="font-size:130%;color:#000000;">5. What impact do centrally assessed properties have on tax rates?</span><br /><span style="font-size:130%;color:#000000;">6. Does Utah need a Prop 13?</span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com5tag:blogger.com,1999:blog-26806152.post-80161526566012902512007-07-25T15:15:00.000-06:002007-07-25T15:35:19.905-06:00Congestion Pricing and Maximizing Freeway Throughput<span style="color:#000000;"><span style="font-size:130%;">Transportation experts have demonstrated that congestion pricing can maximize highway throughput. Throughput is defined as the number of cars that cross a certain point on a freeway over a given amount of time. Cost-effectively maximizing throughput is obviously an important objective, and congestion pricing can achieve this objective by controlling average vehicle speed during rush hour.<br /><br />Intuitively, two factors impact a freeway’s throughput: the average speed of the vehicles on the freeway and the number of vehicles on the freeway. Inevitably, these two factors work against each other. As more vehicles enter the freeway, the average speed of vehicles decreases.<br /><br />Studies have shown that freeway throughput is maximized when the number vehicles on the freeway allows vehicles to travel at about 50 mph. In other words, if vehicles are traveling at 70 mph, then throughput is not maximized because the increased average speed is offset by the low volume of vehicles. On the other hand, if vehicles are traveling at 20 mph, then the high volume of vehicles is offset by the low average velocity.<br /><br />By charging commuters to use roads during periods of congestion, the number of vehicles on the freeway is optimized to maximize throughput. As average speeds decline, the price to enter the freeway increases to ensure that vehicle speeds hover around 50 mph.<br /><br />Chao Chen and Pravin Varaiya have demonstrated the relationship between average vehicle speed and freeway throughput. Click <a href="http://paleale.eecs.berkeley.edu/~varaiya/papers_ps.dir/FreewayCongestionParadox.pdf"><strong><span style="color:#990000;">here</span></strong></a> to see the chart.<br /><br />In 2005, the US Department of Transportation issued <em>Report on the Value Pricing Pilot Program Through March 2004</em>. According to the report, a lane with congestion pricing on State Route 91 in Orange County, California carries twice as many vehicles per lane during rush hour than the adjacent toll-free lanes.<br /><br /><strong>Benefits to taxpayers</strong><br />Congestion pricing offers several benefits to taxpayers. First, congestion pricing slows the growth in vehicle miles traveled (VMT) by incentivizing commuters to carpool, telecommute, use roads during off-peak hours, and live closer to work. Slowing the growth in VMT means state and local governments can slow the growth in transportation expenditures.<br /><br />Congestion pricing also improves the utilization of freeways and does this in two different ways. First, congestion pricing encourages drivers, especially discretionary non-commuting drivers, to use roads during off-peak hours when roads are under utilized. Second, as explained above, congestion pricing maximizes freeway throughput by optimizing average vehicle speeds.</span><br /></span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com0tag:blogger.com,1999:blog-26806152.post-12314034717451238112007-07-23T13:39:00.000-06:002007-07-23T15:42:11.106-06:00Mike's Top Twenty Political Songs<span style="font-size:130%;color:#000000;">Later this week, we'll have the results of a report we've done on the disparity between charter school and district school funding.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">In the mean time, inspired by Rep. Urquhart's top ten movies list, we present Mike's Top 20 Political Songs of All Time (in no particular order).</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">Redemption Song - Bob Marley</span><br /><span style="font-size:130%;color:#000000;">Sunday Bloody Sunday – U2<br />If I Had a Rocket Launcher – Bruce Cockburn<br />Right Here, Right Now – Jesus Jones<br />Invisible Sun – The Police<br />Wind of Change - Scorpions<br />Cult of Personality – Living Colour<br />Sonderzug nach Pankow – Udo Lindenberg<br />99 Luftballons - Nena<br />Sympathy for the Devil – Rolling Stones<br />Revolution – The Beatles<br />The Trees – Rush<br />Okie from Muskogee – Merle Haggard<br />Courtesy of the Red, White, and Blue - Toby Keith<br />Fortunate Son – Creedence Clearwater Revival<br />Rain on the Scarecrow – John Mellencamp<br />Star Spangled Banner – Jimi Hendrix/Francis Scott Key<br />Borrowed Time – Styx<br />Rockin’ in the Free World – Neil Young<br />We Didn’t Start the Fire – Billy Joel</span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com5tag:blogger.com,1999:blog-26806152.post-67857032132803547312007-07-19T12:36:00.000-06:002007-07-19T13:32:03.786-06:00Utah School District Spending Report for FY2006<span style="font-size:130%;color:#000000;">How does your school district spend your tax dollars compared to other Utah school districts?</span><br /><span style="font-size:130%;"></span><br /><span style="font-size:130%;color:#000000;">The Utah Taxpayers Association has just released its annual school district spending report. Click </span><a href="http://www.utahtaxpayers.org/annual_reports/schlcomp/schoolspending2006.pdf"><strong><span style="font-size:130%;color:#990000;">here</span></strong></a><span style="font-size:130%;color:#000000;"> to view the report FY2006.</span><br /><span style="font-size:130%;"></span><br /><span style="font-size:130%;color:#000000;">The report contains district-by-district per student spending data, including the following:</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">- instructional expenditures</span><br /><span style="font-size:130%;color:#000000;">- instructional expenditures as a percent of total operations</span><br /><span style="font-size:130%;color:#000000;">- transportation</span><br /><span style="font-size:130%;color:#000000;">- library</span><br /><span style="font-size:130%;color:#000000;">- maintenance/operations</span><br /><span style="font-size:130%;color:#000000;">- student services</span><br /><span style="font-size:130%;color:#000000;">- interest</span><br /><span style="font-size:130%;color:#000000;">- facility construction</span><br /><span style="font-size:130%;color:#000000;">- food services</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">The report also looks at district revenues (operations, capital, nutrition, non K-12, and total) on a state-wide basis.</span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com5tag:blogger.com,1999:blog-26806152.post-65881767281882282492007-07-16T21:29:00.000-06:002007-07-16T22:26:07.603-06:00Congestion pricing and the environment<span style="font-size:130%;color:#000000;">Congestion pricing is an issue that taxpayer advocates and environmentalists can rally behind. Environmentalists in other states and countries have been advocating for congestion pricing, and it's only a matter of time before environmental groups in Utah catch up with their counterparts in other places. </span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">Congestion pricing slows the growth in vehicle miles traveled by incentivizing car pooling, telecommuting, living closer to work, and leaving earlier/later. This is good for the environment due to reduced pollution and good for taxpayers because growth in transportation spending is reduced while congestion is reduced.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">Congestion pricing will also shift discretionary non-commuting traffic to off-peak hours. According to the US Department of Transportation, up to 50% of rush-hour traffic is discretionary (that is, non-commuting) Even if <em>discretionary</em> traffic is merely shifted instead of reduced, this still reduces pollution because fewer drivers will be stuck for longer periods of congestion burning more fuel than if they were just able to drive at normal freeway speeds.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">According to the Texas Transportation Institute's <em>2005 Urban Mobility Report</em>, Americans waste more than 2.3 billion gallons of fuel per year due to congestion, and that's bad for our wallets and for the air we breath.</span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com0tag:blogger.com,1999:blog-26806152.post-48556149011573923892007-07-12T08:14:00.000-06:002007-07-12T09:36:26.265-06:00Are massive local sales tax increases for transportation “real” taxes?<span style="font-size:130%;color:#000000;">Are massive local sales tax increases for transportation “real” taxes or just “pretend” taxes?<br /><br />To most people, this sounds like a strange question. “Of course, local sales taxes for transportation are real taxes”, nearly every one would reply.<br /><br />We’ve been talking to a lot of people who are concerned about transportation funding, and surprisingly many of them seem to think that local sales taxes for transportation are not "real" taxes. Frequently, they act like sales tax dollars from a taxpayer's perspective are just Monopoly money.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">In most cases, they don’t articulate their position that way, but their arguments against congestion pricing indicate that they really don’t think these sales taxes are real, or certainly not worth worrying about.<br /><br />The Transportation Lobby has really zoomed in on local sales tax increases because – due to near invisibility -- they are incredibly easy to pass. If a well-funded and organized group is pushing for a sales tax increase, voters most likely will not reject it unless it is an especially bad idea. The Lobby understands the boiling-the-frog principle as well as anyone.<br /><br /><strong>The Main Event: Congestion Pricing (and other measures) vs. Increasing Local Sales Taxes Every 5 to 10 years (and increased earmarking of state sales taxes for transportation).</strong><br /><br />Elected officials and interest groups have already launched their effort to periodically increase local sales taxes for transportation. It began more than a year ago, and it scored early victories last year with sales tax increases in Utah and Salt Lake counties. The goal is to increase sales taxes by several hundred million dollars per year. State Sen. Ed Mayne wants to increase state sales taxes by more than $500 million per year.<br /><br />This is why the Utah Taxpayers Association has proposed a four-point transportation reform plan. Of the four proposals, congestion pricing is encountering the most opposition, and this is where the issue of “pretend” and “real” taxes comes in. Here are some examples.<br /><br /><strong>Comment:</strong> “Congestion pricing is bad because it will cost people and businesses money. We should do sales tax increases instead.<br /><strong>Response:</strong> Sales tax increases cost people and businesses money too. At least with congestion pricing, people will change driving habits which means that state and local governments will actually reduce more congestion while spending less than they otherwise would if they relied on sales taxes.<br /><br /><strong>Comment:</strong> Congestion pricing is bad because roads should be free. Increase sales taxes instead.<br /><strong>Response:</strong> Roads have never been free. Taxpayers have always paid for them, traditionally with user fees like gas taxes but more recently with a combination of general taxes and user fees. When did sales taxes become "free"?<br /><br /><strong>Comment:</strong> Congestion pricing is bad because once the road is paid for, pricing will still be there. Increase sales taxes instead.</span><br /><span style="font-size:130%;color:#000000;"><strong>Response:</strong> The same situation exists with state and federal gas taxes. We drive every day on roads that have been paid for, and we pay gas taxes to drive on these roads. The same applies to sales taxes. We won’t be paying less sales taxes when we drive on roads that have been paid for.<br /><br /><strong>Comment:</strong> Congestion pricing is bad because we already pay gas taxes. Therefore, it’s a double tax. Increase sales taxes instead.<br /><strong>Response:</strong> That means that sales taxes must be double taxation as well since we’ll continue to pay state and federal gas taxes (and motor vehicle registration fees, impact fees, and existing state, county, and city sales taxes of which a large portion goes to roads).<br /><br /><strong>Comment:</strong> Truckers will pass on congestion prices to consumers. Increase sales taxes instead.<br /><strong>Response:</strong> Business will pass on sales taxes on to consumers, either by applying sales taxes at the register on final purchases or hidden in the prices of the things we buy since sales taxes are applied to many business inputs.</span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com1tag:blogger.com,1999:blog-26806152.post-54245780085408016022007-07-09T22:29:00.000-06:002007-07-10T23:02:57.581-06:00Current system for electing state board of education members is too easily manipulated<span style="font-size:130%;color:#000000;">Rep. Carl Wimmer is proposing partisan elections for the state board of education. Opponents criticize this as “politicizing” education.<br /><br /><em>Reform opponents, however, don’t want voters to know how their state school board is currently “elected”. Not only is the current system “politicized”, it is hardly democratic, and the process is easily manipulated by the education establishment. This manipulation, not vouchers, is the impetus for changing the current process.<br /></em><br />When considering the current system for nominating and electing school board members, ask yourself if you think Utah should elect legislators and governors in the same way.<br /><br />Here’s how the system works.<br /><br /><strong>Step One: Low-profile committee recruits and selects nominees for the state school board<br /></strong><br />A group of insiders gets to determine who appears on the ballot in November. Currently, a low-profile 12-member committee consisting primarily of UEA supporters is <em>supposed</em> to select three candidates in each board race for the governor’s consideration. In order to get on the ballot, a candidate must be nominated by this committee. Members of the committee are supposed to represent a broad range of interests, but they typically represent the education establishment. Unlike the two-party process, this committee is virtually unknown to the public, and the local media provides very little if any coverage of this committee’s membership or decisions.<br /><br /><strong>Step Two: The Governor makes his choices<br /></strong>Using the committee’s list of recommended candidates, the governor then picks up two candidates for each race (or one if the committee only picks one candidate for a given race) and then puts these names on the ballot.<br /><br />When the committee picks one candidate for a given race (which is a violation of the law), then that one candidate automatically appears on the ballot unchallenged and is elected to the state board of education.<br /><br /><strong>Step Three: The people “choose”<br /></strong>This is hardly an election in the true sense of democracy since the candidates on the ballot were not selected by an open, accessible, contested process. They were selected by a low-profile committee and the governor. At least in a partisan process, most races would be contested, either within the party at convention or primary or in the general election.<br /><br />To get on the ballot in the current process, there are no public debates or meet-the-candidates nights. It’s all done quietly and without any scrutiny except for a very small committee.<br /><br />Sometimes, a reform candidate manages to get on the ballot, but this is rare. In the end, the “election” is almost always a perfunctory ratification of the establishment’s candidates, not a true election.<br /><br />Some people claim that Utah’s “one-party” partisan process is too restrictive and is dominated by Utahns with narrow interests. However, the current process for selecting state school board members is much more restrictive and closed than the process for electing the governor and legislators.<br /><br /><strong>Brazen manipulation of the system in 2006, not vouchers, is the impetus for change<br /></strong>The current restrictive process is bad enough, but the education establishment’s brazen manipulation of this process last year was the final straw for many legislators. Here’s a summary of what happened:<br /><br />1. Although state law requires the committee to be formed by November 1 in the year prior to the election, the 12-member committee was not formed until March, just days prior to the candidate filing deadline.<br /></span><br /><span style="font-size:130%;color:#000000;">2. The committee was stacked with mostly UEA loyalists.</span><br /><span style="font-size:130%;color:#000000;"><br />3. None of the eight races had more than two nominees for the governor to choose from.<br /><br />4. In three races, the committee did not recommend anyone other than the incumbent.<br /><br />Opponents of partisan elections for state board of education are going to have a hard time justifying the current system.<br /></span><br /></span><span style="color:#ffffff;">Utah Taxpayers Association</span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com19tag:blogger.com,1999:blog-26806152.post-20442474622096674712007-07-02T22:20:00.000-06:002007-07-10T23:03:45.102-06:00Incrementalism, part 3: Bryan Gray of the Davis County Clipper<span style="color:#000000;"><span style="font-size:130%;">Bryan Gray of the <em>Davis County Clipper</em> gives us an opportunity to revisit the issue of incrementalism. </span><span style="font-size:130%;">We've previously written two posts on incrementalism. You can view those <a href="http://utahtaxpayer.blogspot.com/2006/11/incrementalism-101-part-1.html"><strong><span style="color:#990000;">here</span></strong></a> and <a href="http://utahtaxpayer.blogspot.com/2006/11/incrementalism-101-part-2.html"><strong><span style="color:#990000;">here</span></strong></a>. Incrementalism is a strategy employed by the spending lobby to gradually increase our tax burdens over time. It has two parts:</span></span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">1. Justify all or nearly all tax increases as costing only a few pennies per day or a few pennies per purchase</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">2. Oppose all tax cuts as not worth implementing because these tax cuts will save us only a few pennies per day or purchase.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">Of course, over the long term, small tax increases accumulate into large tax burdens, and that's exactly the goal of those who regularly rely on incrementalism to justify tax increases and oppose tax cuts.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;"><span style="color:#000000;">In his </span><a href="http://www.davisclipper.com/link.asp?smenu=124&twindow=Default&sdetail=21790&mad=No&wpage=1&skeyword=&sidate="><strong><span style="color:#990000;">weekly column</span></strong></a><span style="color:#000000;"> last week, Gray wrote </span></span><br /><span style="font-size:130%;"></span><br /><span style="font-size:130%;color:#000000;"><em>"The proposed tax is only a quarter of 1 percent. If you buy a Subway sandwich, you'll pay an additional penny. Buying property now rather than at a higher price later is a no-brainer."</em></span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">We naturally agree with the second part that buying transportation corridors is a good idea. In fact, it's one of the items in our four-part transportation reform proposal. However, is another sales tax increase really needed? Government revenues are growing at historically high rates (local sales tax revenues increased 15% in FY2006), and government could spend transportation dollars more efficiently by slowing the growth in vehicle miles traveled by increasing transportation user fees such as congestion pricing and gas taxes (while reducing general taxes to maintain revenue neutrality).</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">The additional-penny-per-Subway-sandwich argument is not the first time Gray has resorted to incrementalism to support tax hikes. In previous columns, Gray wrote</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;"><em>"If the Open Space proposal passes, a dinner for two at a nice restaurant will skyrocket an entire two cents! If the Open Space proposal passes, the owner of a spanking new Mercedes will pay an extra $40."</em></span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;"><em>"Have yourself a tiny tax increase...Through the year, you'll barely even notice [the tax increase], a dollar here or there"</em></span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;">Note: we could not find links to these comments on the <em>Clipper</em> website. We are relying here on hard copies in our files.</span><br /><span style="font-size:130%;"></span><br /><strong><span style="font-size:130%;color:#000000;">Painting the freeways apricot?</span></strong><br /><span style="font-size:130%;color:#000000;">In 2004, Gray wrote "If someone proposed that we pay five cents per year to paint the freeways an apricot color, I'd vote against it". First of all, no one is proposing that, and we can be quite sure that no one will propose that in the future either. While Gray is obviously trying to be funny here, it's clear that he really could not think of a serious tax increase or expenditure to oppose.</span><br /><span style="font-size:130%;color:#000000;"></span><br /><span style="font-size:130%;color:#000000;">Several months ago, Gray also came up with the worst argument to-date against congestion pricing. Read about that <a href="http://utahtaxpayer.blogspot.com/2007/01/responding-to-bryan-gray-at-davis.html"><strong><span style="color:#990000;">here</span></strong></a>.</span><br /><span style="font-size:130%;color:#ffffff;">Utah Taxpayers Association</span>Utah Taxpayerhttp://www.blogger.com/profile/11022109695383855026noreply@blogger.com0