ST. GEORGE — Local police and fire chiefs have sounded the alarm for years that increasing health insurance costs and salaries have been hiking needed funds, and those needs are becoming a growing tumor in city budgets.
But even as local residents have shown overwhelming support for increases in police, fire and emergency medical services, some have shown concern with the idea of using an increase in property taxes to fund those increases.
That has left local mayors and city council members at a loss of how to raise the funds needed to maintain and enhance public safety.
“That’s the challenge,” Ivins Mayor Chris Hart said. “Are we able to pay for what we want to have?”
A local representative in the state Legislature thinks he has the answer, but it still uses that three-letter word: tax.
Sponsored by Rep. Joseph Elison, R-Washington County, local option sales tax amendments, designated HB 442 in the 2024 Utah legislative session, would allow cities and county commissions in larger counties with 1 million people or fewer to impose a sales tax to fund emergency services like fire departments and EMS.
The Utah House Revenue and Taxation Committee will have a hearing on the bill Wednesday afternoon.
Elison said unlike property taxes that are directed at a city’s residents, a sales tax increase is directed more toward visitors.
“I don’t want to increase anybody’s taxes. That is not the objective here,” Elison told St. George News. “I want to find a way to allow maybe some of that tourist traffic to help cover our costs.”
The maximum sales tax increase a local government could impose is 1% and it would not apply to food purchases. That means an extra quarter for a new dress at a local department store and an extra $2 per night for a stay at one of the top local luxury hotels.
Elison acknowledges that the tax bill will be bigger for big spenders.
“If you’re a big spender, then it may not be a great idea for you,” Elison said. “But if you’re an average person or a frugal spender, then it wouldn’t be as big (of) … a deal. That’s kind of the crux of it. Because if it’s going to raise people’s taxes arbitrarily, I’m not interested in that.”
Last year, a law was passed that allows cities in counties with 175,000 people or less to impose a sales tax for fire and EMS services. That left out Washington County, which has a population of 191,226, according to the U.S. Census. The new legislation would extend to every county in the state except for Salt Lake County.
The words “truth in taxation” often strike fear in local politicians’ ears. When St. George tried to use a truth-in-taxation hearing to increase property taxes to fill a shortfall in the police budget in August 2022, it incurred a public outcry and the measure failed in a 4-1 City Council vote.
In Ivins and Santa Clara, which share a fire department, a combination of firefighters doing wildfire duty away from town, absences of other emergency workers and the overtime to make up for the lost hours left Ivins with a need to amend its 2023-24 fiscal year budget
Long term, the taxes coming in from Black Desert Resort will be a big help. But in the short term, additional charges from the Fire Department have created a $225,000 additional budget bill combined for Santa Clara and Ivins.
While Santa Clara is still determining how to deal with the shortfall, Ivins will be holding a public hearing this Thursday night at Ivins City Hall on measures that include reducing animal shelter, street maintenance and capital project funding for the remainder of the fiscal year to balance the budget.
Both cities also held a joint council meeting on Jan. 25 to partially hammer out the fire budget issues, including a contention by Ivins that Santa Clara has overcharged the city of Ivins a combined $129,000 since the two cities combined their fire departments in 2018. Santa Clara has ultimate oversight over the Fire Department while Ivins serves the same role over the combined police force.
Along with overtime and salaries, the big drain budget-wise has been from emergency medical services. Santa Clara officials have noted that unlike Ivins, Santa Clara didn’t have EMS services before the merger, relying on Dixie Ambulance, which was the private carrier in the area before Gold Cross.
Some have questioned whether EMS needs to be handled in-house, or whether Santa Clara and Ivins should return to relying on something like Gold Cross. They say EMS, when run on the city level, usually has more expenses than revenues.
“I was told you don’t want EMS; it’s costly,” Santa Clara City Manager Brock Jacobsen said during the Jan. 25 meeting, noting that Santa Clara also got service from Ivins EMS before the merger. “Ivins City was already covering Santa Clara in EMS at no cost to Santa Clara City. Thank you to the Ivins residents for helping us but would have we taken it on? I’m not sure.”
But the mayor of Ivins said in response that residents have valued the quicker response times that have come from having the cities run EMS services and are willing to incur the cost.
“We were serviced by Dixie Ambulance and service times were so terrible and people were literally dying,” Hart said. “Our residents supported having EMS. Now, service is better than it has ever been. If you asked our residents to take this expense, they would.”
Santa Clara-Ivins Fire Chief Andrew Parker noted during the meeting that a man whose life was saved when he went into a cardiac arrest at Santa Clara’s Gubler Park in February 2023 is an example of why having an in-house EMS service has been worth it.
“I keep that in mind when I hear someone say, ‘Hey, let’s get rid of EMS,’” Parker said. “My job is saving lives, not just the cost.”
But Parker and other fire officials have noted Elison’s legislation as a solution.
A good tax?
Elison, whose district mainly encompasses Hurricane, LaVerkin and eastern Washington County, said the origins of his bill lie in a failed attempt in late 2022 to increase property taxes in the Hurricane Valley Fire District’s boundaries.
Up again came those three dreaded words: truth in taxation.
“They had a truth in taxation and of course, it failed miserably because they were … actually proposing a raising of property tax of about, I think it was like 80 or 90%,” Elison said. “So the board came out of that meeting saying, ‘OK, what do we do?’ Because we have a budgetary shortfall we’re trying to meet.”
Elison’s legislation, which is presently in committee, would still require a public hearing for a sales tax increase before going before a city council or county commission, but it would not require the extensive audit required in a Truth in Taxation hearing.
But Elison, who deals with tax values in his day job as the owner of St. George retirement planning firm Elison Financial Group, says a sales tax increase is more palatable than a property tax increase. The idea would be that most residents wouldn’t see the tax increase as much as tourists to the area and those who already have the means to spend enough where a 1% sales tax increase would be felt.
For that reason, he said this tax is not a dirty word.
“The tourists are covering their fair share, but it’s not increasing the tax to the public. So it’s a net neutral to the average citizen,” Elison said. “If they’re looking at raising everybody’s taxes, I would not favor that, and I would vote against that personally.”
He adds that increasing the sales tax may ultimately reduce property taxes.
“We could actually reduce the property tax a little bit, if not all, and then replace it with a sales tax and let the gap in the funding come from tourists,” Elison said.
Using a sales tax increase to fund emergency services and public safety has been tried elsewhere.
According to the Tri-City Herald, Benton County, Washington, passed a 3% sales tax increase in 2014 to increase funds for local law enforcement. Since then, according to the Herald, violent crimes in the area have gone down 17.4% while more than 55 officers, deputies and prosecutors were added to city and county payrolls.
It’s unclear what effect the sales tax increase has had on property taxes, as unlike in Utah, property taxes in Benton County increase based on the rate of inflation. Nevertheless, last November 73% of voters in Benton County voted to renew the sales tax increase.
In Southern Utah, there is less certainty that a sales tax increase to fund emergency services would find support.
Ultimately, Santa Clara City Council member Ben Shakespere says it will come to whether local residents want better response times and emergency services and are willing to pay for it.
“We want these services but it comes at a cost,” Shakespeare said. “None of us want truth in taxation but even a state bill comes down to a tax.”
Check out all of St. George News’ coverage of the 2024 Utah Legislature by clicking here.
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