Jacob Wiegand, Deseret News
FILE – Salt Lake City Council Chair Erin Mendenhall speaks while Salt Lake City Mayor Jackie Biskupski and members of the Salt Lake City Council meet with members of Deseret News and KSL-TV Editorial Boards on Monday, April 9, 2018, at in Salt Lake City.
SALT LAKE CITY — Amid concerns from downtown business leaders and a fellow council member about specifically how a proposed sales tax hike’s revenue will be spent and bound in the future, Salt Lake City Council Chairwoman Erin Mendenhall confirmed she’ll be delaying the vote.
“I’ve decided to delay it until May 1,” Mendenhall told the Deseret News on Monday, the day before the Salt Lake City Council was previously scheduled to vote.
Her decision comes after fellow council member, Councilman Charlie Luke, requested the delay, raising concerns about how the sales tax hike’s roughly $33 million in new annual revenue would be prioritized for streets, police, transit and affordable housing, and how city leaders might be able to lock in the funds so future councils or administrations wouldn’t be able to spend the money on other things.
Downtown business leaders have also expressed concern about a lack of details for the funding.
“Before I can vote for these increases, I believe the City Council must be specific about how the money will be spent and take measures to ensure the new revenue will not be reappropriated to other future needs or priorities,” Luke wrote in a Facebook post late last week. “Since we don’t seem ready to explain or commit to that specifically, I cannot vote for the increases at this time.”
Luke said in an interview Monday that he wants city leaders to “learn from our past mistakes,” noting that after thecity raised property taxes nearly five years ago for infrastructure needs, the revenue was re-appropriated to other priorities a few years later.
“I don’t want us to make that same mistake again,” Luke said.
Mendenhall said the vote’s two-week delay will give the council time to discuss a more specific breakdown of how the 0.5 percent tax increase will be spent and how city officials may bind the funding into the future.
Mendenhall has previously suggested bonding with the sales tax revenue to legally lock it down for road projects — but that’s a formal discussion that the council hasn’t yet had.
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“This will allow the full council to have a complete discussion about specific appropriations and what measures we can implement to ensure that future councils and administrations are as bound as possible to funding these needs as we desire them to be,” Mendenhall said.
Luke said the delay will help city leaders “better articulate exactly how the money will be spent, what the funding levels will be for the different priorities, and prepare measures to prevent future reappropriation as much as possible.”
“I look forward to continuing to hear from constituents about their priorities and concerns as these discussions progress,” Luke said.
The delay also comes amid concerns from downtown business leaders, who haven’t backed the tax increase amid uncertainty of exactly how the new revenue will be spent.
Much of Salt Lake City’s sales tax revenue is generated from downtown shopping. Jason Mathis, executive director of the group that represents downtown businesses, Downtown Alliance, said “we appreciate” Mendenhall’s decision to delay the vote.
“We are not opposed and we don’t want to stand in the way of this proposal if it really is the best option,” Mathis said. “But we think some additional time to vet the concept and develop a more thorough plan would help our businesses feel better about the concept.”
Mathis added, “We hope this pause will help flesh out this proposal, improve the process and ensure better public policy. A collaborative and more methodical strategy can only improve the eventual outcome.”
Linda Wardell, general manager of City Creek Center’s retail operations, who is also a member of the Downtown Alliance, also said she appreciated the delay, noting that she has struggled to support or oppose the sales tax hike because the city’s plans for the revenue have lacked specifics. She said any sales tax increase could mean a “competitive disadvantage” for downtown businesses.
“We want to be a part of a world-class city, so we understand that not all of the tax dollars are going to be spent in the central business district, but we certainly want to understand how the city plans to fund all of the projects that are part of the Funding our Future initiative and understand how the funds are going to be prioritized,” Wardell said.
Salt Lake City officials have outlined general priorities for the funds: roads, transit, affordable housing and public safety. For those, city staff have highlighted possible ways to spend the sales tax revenue, including roughly $5 million a year to implement the city’s new affordable housing plan, $12 million a year to pay for 50 new police officers for neighborhood policing, $8 million a year to increase city transit service, and $20 million a year to bring the city’s overall road system to at least fair condition and to properly maintain roads into the future.
But Wardell said she’d want to see more specifics on exactly how that money will be spent.
By May 1, the City Council should have “ample time to refine our appropriations,” Mendenhall said.
One day before, April 30, Mayor Jackie Biskupski is scheduled to present her budget, said her spokesman Matthew Rojas. In preparation, Rojas said Biskupski’s team has been drafting two budgets: One with new sales tax revenue, and one without, so by then, council members should have a more detailed look on specifically how the revenue would be spent.
“We respect the council and we agree with them wanting to make sure we’re doing everything to communicate to the public (about) this funding,” Rojas said. “We want it to be very transparent.”
As of Monday, most participants in the city’s online survey, available at fundingourfutureslc.com, supported the two tax hikes. Of about 2,100 responses, roughly 68 percent supported the bond and sales tax increase independently, Rojas said.
The sales tax hike — which would be an increase of about or 5 cents for every $10 spent — is part of a package of two tax increases Mayor Jackie Biskupski proposed in her 2018 State of the City Address.
The other tax hike would be an $87 million general obligation bond that voters would weigh in on this November, if city leaders decide in August to place it on the fall ballot. If approved by voters, the bond would result in an estimated increase of $5 a year in property taxes for the average Salt Lake City homeowner but replace two bonds approved by voters 20 years ago. City leaders say its revenue would help the city get a jump-start on major road projects, complemented by the new annual sales tax revenue.