Senate Bill 136: Transportation Sales Tax

Background

During the 2018 Utah Legislative session, Senate Bill 136 (SB136) passed. The bill provides a positive step forward for the future of our region and state. Utah is growing, and changing, and with that comes the need to efficiently use resources to provide transportation choices for our communities. SB136 authorizes funding for transit and local needs, and enhances the coordination of transportation, land use, and economic development. The bill went into effect on May 8, 2018.

The bill has many provisions; among them is the reform of the Utah Transit Authority (UTA). SB136 renames UTA to "Transit District of Utah" and changes the UTA Board from 16 part-time members to three full-time members (nominated by counties, appointed by Governor, and confirmed by Senate), and creates a nine-member local advisory board (appointed by the County Councils of Governments).  There has been much discussion about the cost associated with changing the name of UTA but these changes will happen over time and as resources allow.

Local Option Sales Tax - 4th Quarter 

If this bill sounds familiar, it is. In November 2015, the local option sales tax, 4th quarter or Proposition 1 was placed on the ballot. Proposition 1 would have imposed sales and use tax for transportation improvements at a cost of a quarter-of-one-percent (0.25% or the equivalent of 1 cent for every $4 spent). The Proposition failed in Salt Lake County by a narrow margin - 51% to 49%. Voters decided to pass on the state's largest pot of sales tax dollars, nearly $58 million. Many people believe the reason this proposition did not pass was because of the opposition surrounding UTA. Our legislators listened and took action in SB136 to reform UTA.

Salt Lake County Ordinance

The transportation bill (SB136) gives leaders in Utah and Salt Lake Counties the power to impose Proposition 1through a vote from the county's legislative body or place the proposed tax increase on the ballot.  

There is an incentive for Salt Lake County to act soon. If the tax is imposed before June 30, 2019, the County could capture 100 percent of the revenue up until that date - this means about $40M in new revenue for transportation infrastructure.  Salt Lake County intends to use half of the funds to pay off transportation debt and the other half to fund regionally significant transportation projects.  Beginning July 1, 2019, the funds will be distributed as follows:   40% to cities (0.10%), 40% to the transit district (0.10%), and 20% to the county (0.05%).

In April, the Salt Lake County Council passed an ordinance to enact the local option sales tax. However, the ordinance only comes in to play if they receive a resolution from the cities, towns and metro townships representing sixty-seven percent (67%) of the Salt Lake County population. If the tax increase is enacted, it would generate about $40 million more for transportation projects in Salt Lake County by raising sales taxes by roughly one penny for every $4 spent. If the county does not receive the support from area cities and towns, they will not enact the tax for the 4th quarter. After July 1, 2020, cities with transit service will have the option to impose the tax. If the city imposes it, 0.125% goes to the city, and 0.125% goes to the transit district.

What Does This Mean for Draper City?

Salt Lake County is asking Draper City to pass a resolution in support of the transportation tax for the 4th quarter. Beginning July 1, 2019, Draper City can expect to receive approximately $1,113,563 annually from the transportation tax.

At the May 22, 2018 Draper City Council meeting, Salt Lake County Councilman Max Burdick and was Andrew Gruber from  the Wasatch Front Regional Council (WFRC) will present information on the transportation tax to the City Council in the Study Meeting at 6:00 p.m. 

At a future city council meeting, council members will be discussing this request, and at some point they will make a decision on whether or not to pass a resolution in support of the county's request. Cities have until June 22, 2018, to signal support to Salt Lake County.