Friday, November 05, 2010

October 2010 Legislative Update

Most parties acknowledge that America’s immigration system is broken, and communities through out Utah and the country are suffering the consequences. Those consequences include divisive dialogue on how to solve this problem, cultural mistrust, community isolation, criminal activity, and economic inequality that continues to foster a divide in our communities.

In light of the many concerns regarding the current state of the issue, several Utah legislators, on both sides of the issue, are working to address the problems that they perceive, and many of the legislative efforts are focused on enforcement-based solutions. With an understanding that any enforcement-based solution will require local governments to act as the enforcement entity, the ULCT has begun to compile data from the state’s various police departments on the anticipated costs and resources that will be required to carry out any potential law change.

While the ULCT Policy Committee has not yet weighed in on the social and policy issues surrounding immigration reform efforts, we have been working diligently with legislative leaders, the state fiscal analysts, and most city police departments to gather pertinent fiscal information that will be necessary to fully understand the fiscal impact of immigration reform.

We anticipate that once formal proposals have been formulated, the ULCT Policy Committee will also begin to focus on any policy issues that may cause concern. We are in the process of compiling the fiscal information we have received and will be sending out the numbers and analysis in the next few weeks which will hopefully provide more insights into the costs and resources required of local government for this effort. If you have questions about the various proposals that are being contemplated please let me know.

As is likely the case in your community, the tough budget continues to drive much of the dialogue on Capitol Hill. While in June, the state fiscal analysts were telling legislators to anticipate the year-end deficit (ending in June) to be as high as $150 million, with tax collections complete and the report from the State Division of Finance released, there was some “good news” issued in late September. I say “good” in the sense that it is better than the anticipated $150 Million potential deficit.

Instead of the anticipated $150 Million shortfall, actual revenue to actual expenditures left the state with a $28 Million deficit. That was created by tax receipts being $48 Million less than anticipated, but state agencies spent $20 Million less than authorized, leaving a net $28 Million deficit. That $48 Million short fall in receipts is held both in the education fund and the general fund, with $4 Million assigned to the general fund and the remaining $44 Million attributed to income tax shortfalls that are dedicated to the education fund.

So, what does it all mean? Well fortunately during the 2010 session the State anticipated and provided resources to address these small deficiencies to avoid a mid-year crisis. So there is no “dooms-day” to speak of. In addition, the state is much better off than they anticipated back in June, so I guess that can be construed as “better” news … maybe not “good news”, but certainly “better news than anticipated”. Inevitably, however, the state will still be looking to grapple with a daunting budget during the 2011 session, making appropriations requests and general program funding a difficult task for all involved.

Land Use:
The Land Use Task Force and its subcommittees have been working diligently this summer to identify and negotiate beneficial land use bills for the 2011. The most comprehensive effort has been directed toward an Impact Fees Act re-codification, which we are proud to report reorganizes an otherwise difficult act, clarifies agreed intent and actually adds flexibility for those local governments who, because of the slow economy, have either decided to support affordable housing projects by waiving impact fees for the project, or have decided to repeal or suspend their collection of impact fees for the near term.

This year, the Land Use Task Force also concentrated on revisions to the Local District statute to bring local districts under the same impact fees, reasonable diligence, rip cord and exactions mandates that govern cities, towns and counties.

A third Land Use Task Force bill will add accounting parameters to the imposition and collection of Development Fees. The notion is that Development Fees should be similar to business license fees in that they should be imposed only for the actual cost of delivering the service. However, the bill does not restrict the types of development services for which fees are collected. Nor does it require a fee study prior to the imposition of development fees.

The Billboards subcommittee of the Land Use Task Force negotiated to a détente with the Billboards industry during the interim and other than a beneficial bill to strengthen UDOT enforcement of billboard regulation along the state highways, we expect no billboards legislation this year.

Finally, the Water Law subcommittee of the Land Use Task Force has negotiated a one year hiatus from change application legislation as it continues to develop a consensus based approach to reforming what some have characterized as a “secret decoder ring” process to change water from agriculture to urban uses in the State Engineer’s Office.

The Land Use Task Force has been as successful in channeling dialogue about certain land use issues as it has been in developing consensus-based legislation. We have received commitments that proposed legislation to restrict aesthetic or historic district legislation will not be pursued this year. Similarly, threatened Transfer Fee legislation should not surface in 2011.

As in the past, we believe we will receive united opposition from each of our members (developer and government alike) to any proposed land use legislation that has not been vetted through the Land Use Task Force.

Although the budget situation continues to focus on revenue shortfalls there appears to be little likelihood of tax increases. Several “one-time” tax adjustments mentioned during the last session (quarterly estimated payments and modification or elimination of the vendor sales tax discount) remain part of the discussion. The ongoing funding for transportation may at some point involve a gas tax increase. The critical issue for cities is to ensure that any change is part of the existing distribution formula. Lastly, there is an ongoing examination of public education capital equalization options. All general agreement as to the need there is wide divergence as to the funding method.

General Government:
Because the legislative elections have been consuming most legislator’s time during the summer and fall, very little is being discussed regarding general municipal government issues. As usual, there will be several pieces of legislation with a municipal impact, but there are not major issues being contemplated by legislators that we are aware of. ULCT staff has, however, been working with stakeholders of a few proactive municipal changes. Most of these changes affect just a handful of communities, but a quick run-down of the items may be helpful. If you have any questions on any of these items don’t hesitate to drop us a line and we will be happy to provide more detail.

1. Alcohol Reform: Working on legislation to create more full service restaurant liquor licenses in exchange for a reduction in unused tavern licenses
2. Redefining a qualified “food bank” to include municipal operated “food banks” – this allows for state assistance with operations of municipal food banks.
3. Allowing for council reappointments during military deployment of a councilmember.
4. RDA Changes – Address urban core redevelopment and TEC approval process for such activities.
5. Legal Non-Conforming Use of rental dwellings and building code upgrade requirements that can be imposed.
6. Change in form of government process clarifications.

Recap and Overview:
As you can see, preparations are well underway for the 2011 session with plenty of items to consider. We anticipate that the pace will increase significantly after the November elections, with a mad-dash to the start date to the session. We will keep you apprised of the pertinent municipal issues as they become available.

Until Next Time....Enjoy!!