Entering the Home Stretch

Well, it looks like it is almost over for the 2007 Utah Legislative Session and despite a tough set of circumstances, local government has done pretty well this year. So lets quickly recap what has happened and what still needs to get done before we end at midnight tonight.

• Removal of Food from the Sales Tax Base for the Boutique Taxes. While the original bill, HB282 is yet to pass, the necessary offsets to ensure that local governments are in large part compensated for the reduction in the size of the sales tax base is moving quickly. We were successfully negotiated a 0.1% increase for all resort communities and a 0.05% increase for the municipal transportation tax and mass transit taxes that are imposed by many of our communities. In addition, it looks like a bill to increase the B&C allocation for local road projects will also pass today. That bill is sitting on the 3rd reading calendar of the Senate and should be heard early this morning. That bill will generate an additional $2.5 million for local road projects to also help offset any losses associated with the removal of food from the boutique sales tax base
• Omnibus Land-Use Bill. Our omnibus land-use bill, SB-215 also passed this year. This was bill was a consensus based bill that was being heavily pushed by local government and the development community. This bill clearly signifies that when stakeholders come to the table during the interim, good legislation moves quickly through the legislative process.
• Environmentally Sensitive Zoning. Thankfully for all local governments, the legislature saw the wisdom, albeit imposed by local government pressure, to not pursue a bill to limit local governments ability to regulate development of sensitive lands to include watersheds, flood plains, steep grades, etc. This bill will not move forward this year and will stay circled on the House reading calendar.
• Retirement. While the legislature did not fund an increased COLA adjustment for state and local public safety officers, they also didn't impose the increased COLA adjustment on local government without funding the benefit enhancement. In years past the legislature has attempted to award the benefit without the requisite funding, fortunately the bill was introduced this year with a complete funding package, but due to the fiscal impact, the bill was not funded and will therefore not pass. Also on retirement, a significant push to remove the defined benefit pension program from state and local government employees was also stripped of most of its language and now only provides an employee option between defined benefit or defined contribution plans and that option only exists for IT employees of the state -- in essence, the bill went from a full on assault of the current retirement program to a much more delicate and thoughtful approach, an nice outcome for local government.
• Telecommunications. The much opposed statewide franchise bill for telecommunications service has also looks to have failed this year. This bill would have stripped local governments of the local franchising authority for cable services. As you can imagine, we feverishly opposed the measure. The bill will likely stay in the House Rules Committee and thus fail to be considered by the House of Representatives. We will, however, be seeing more of this idea during the interim. Also on telecommunications, it looks like the local gross receipts tax will be slightly lowered this year from a 4% max rate to a 3.5 % max rate. This bill was not opposed by local governments, as we realized that unanticipated gains in the tax were not the intent when the tax was initially implemented a few years ago. This bill should put the end to the debate on the rate for taxation of telecom services.
• Elections. It looks like our elections bill HB-347 will easily pass this morning. We have been working hard to prepare for the upcoming municipal elections, and this bill should help significantly. This one should be done by noon today.
• Eminent Domain. Some gains, but still some anxiousness. It looks like we will successfully regain limited eminent domain authority for our redevelopment agencies, but HB-334 which further restricts our ability to use eminent domain for recreational trails and emergency access is still out there. We have significantly delayed the debate, but there is still some potential for this bill to pass. We will be watching the senate closely to see if it gets considered.

Well, that about covers our laundry list of issues. If you have others to add please don't hesitate to leave a comment. Also, please be watching for our session "wrap" , where we cover, in detail, all legislation that had the potential to affect local government. This publication will be available in early April.

Until next time....ENJOY

Telecom Stalemate and Eminent Domain Fight Loom

After a short meeting with many of the cable franchise stakeholders and the two powerful legislators (Senator Curt Bramble and Representative Steve Urquhart) who happen to be on opposite sides of the cable franchise debate, it appears that a stalemate on the issue will be unavoidable.

While Qwest, Broadweave and AT&T are attempting to impose some variation of a statewide franchise for cable service, the Utah League of Cities, Comcast and Orange Broadband have resisted the effort, largely siting local, municipal control as the main issue that must be protected in any franchise arrangement.

Senator Curt Bramble will likely run SB209 early Friday. This bill imposes a statewide franchise arrangement and removes many aspects of municipal control from franchise arrangements. The current draft of the bill would turn many of the traditional franchise functions over to the state public service commission. The bill will likely pass easily out of the Senate but will have a much tougher time in the House. With only 4 days left in the 2007 legislative session, it is likely that we will be talking about this issue for much of the summer. The obvious default position will be to not pass the legislation in the House and just study it during the interim period ....will see how prophetic this post proves to be.

On another note, it appears that an inevitable fight is on the horizon regarding HB334. This bill, sponsored by Rep. Aaron Tilton, would significantly modify provisions relating to municipal use of eminent domain for emergency access and trails. We have been working hard in the House to express our opposition to the bill, but the vote will be close. If the bill is going to be considered it must happen before tomorrow, so please stay tuned to see how the big debate turns out. If you are interested in the talking points please see them below.

Until next time ... ENJOY.

HB-334
Eminent Domain Amendments
Rep. Aaron Tilton
ULCT Position: OPPOSE
February 22, 2007

HB-334 redefines some “parks”, “trails” and “emergency access ways” to exclude any of these uses from the definition of a public purpose for which eminent domain may be used. The bill also includes intent language that intimates that trails and parks as defined in this bill have NEVER been a public purpose for which eminent domain may be exercised – which is categorically untrue.
ULCT Policy Concerns:

While a legitimate legislative discussion is warranted on the issue of condemnation for walking trails and parks, this bill is far over-reaching in an attempt to provide undue influence in pending litigation between ONE land-owner and ONE municipality. It would be an unhealthy precedent to use our legislative process to “trump” the due process procedures that are embodied in the judicial system. This bill is absolutely unnecessary.

The ULCT does not necessarily oppose clarifying the definition of a trail and park as outlined in this bill, there is deep concern with expanding the exclusion of eminent domain to retroactively apply to any case where such a use has been deemed appropriate by previous statute and our courts. We hare happy to clarify the definition to apply PROSPECTIVELY.

In addition, the ULCT opposes the exclusion of emergency access as a public purpose for which eminent domain by be used. One of the reasons we have the ability to condemn for public utility easements is so that we may access the utility IN CASE OF AN EMERGENCY – We are very concerned with the unintended consequences of this legislation.

The bill falsely implies that the state statute has never allowed for condemnation for trails or parks as defined in this bill, which is just untrue. The sole purpose of this portion of the bill is to provide undue influence in pending litigation. It would be unhealthy to use statewide policy for single legal case that is born of spite. In addition, this section has the potential to reopen legal arguments in previous circumstance were eminent domain was used for trail and park systems. We would encourage the legislature to only clarify the definition in a prospective fashion.

Sales Tax on Food Negotiations Prove Successful

First of all, thanks to all who communicated the League of Cities and Towns concerns to legislators with regard to HB 282, Sales and Use Taxation of Food and Food Ingredients. Needless to say, the debate over boutique taxes and uniform sales tax on food and its impact on local revenues and finances have been intense on Capitol Hill. Our grassroots efforts in opposition both last year and this session have made a significant impact with legislative leadership in their policy approach. As discussed at Monday’s LPC meeting, we have negotiated with House and Senate leadership to have revenue losses in affected cities offset by a 0.1% increase in the resort tax and a 0.05% increase in local option transportation taxes. While these numbers may look small on there own, in many circumstances they represent a 10%-30% increase in the sales tax rate that is being imposed to offset the 10%-30% in revenue losses associate with removing food from the sales tax base in places where such taxes exist. In addition, rural communities will receive an ongoing state appropriation to cover funds lost from the rural hospital tax. While such an arrangement will require some adjustments and doesn’t guarantee a 100% hold-harmless position, we appreciate that state policymakers were cognizant of municipal needs. Speaker of the House Greg Curtis and Senate Majority Leader Curt Bramble presented the proposal to LPC on Monday and in turn LPC unanimously endorsed the plan.

Consequently, we ask you to join the ULCT in ceasing our opposition to HB 282 with your legislators. We have come to an agreeable arrangement with the legislature and we want to work together in good faith to see that it is implemented. Please continue to stay engaged as we approach the final calendar week of the session and continue to adamantly oppose the land-use bills HB 233 and HB 334. While we think a deal is being negotiated to ensure that these two bills are also resolved to our liking (i.e. not passed) we want to ensure that our opposition is still present until such a time that the “deal” is finalized. This should take place within the next day or so, and we will be sure to keep you apprised of the issue as things change.

We appreciate your involvement on these issue and look forward to many more joint efforts to successfully “tell local government’s story” on Utah’s Capitol Hill.

Until Next Time....Enjoy.

President's Day Celebrated

Hopefully you are reading this post from home, as you sit before a nice warm fire and enjoy this wintry President's Day in Utah. For those involved in Utah politics, we will be celebrating President's Day by conducting the public's business on Capitol Hill.

As we turn the final corner of the 57th Legislature, this week signifies the end to considering a bill from one's own chamber -- After Friday, no more House bills will be heard in the House and no more Senate bills will be heard in the Senate. This week also means the end to committee hearings. Wednesday will be the last day for committee hearings, so if you still have a bill that has not yet been heard by a committee it is certainly "crunch time". As you can see by the events that will unfold this week, the end is near -- This will actually be the last full week of the legislature and we will only spend three days of next week going through theses issues.

While the end is in sight, the fun is just beginning. Significant debates on Transportation Funding, Tax Cuts (Sales and Income Tax), Telecommunications, and Land Use regulation still need to be conducted. In fact, it is safe to say the most of the work will actually be done in the next 8 days. Late nights and early mornings are now the mantra as we all try to put the finishing touches on our 2007 lobbying adventure.

We have a few final bills in committee this week, so please stay tuned as the events unfold.

Enjoy.

Hope you Enjoyed Valentine's Day

While many of us may consider this a day to simply celebrate the love of our significant others, it takes on a whole new meaning when the Utah State Senate President is Senator John Valentine. We hope you all took an opportunity to embrace the Day of Senator Valentine. Wednesday was filled with the spirit of love on capitol hill, and as such, local government had another good day.

First, the much opposed HB-166 Transportation Amendments Bill, which would place the Utah Transportation Authority (UTA) under the State Department of Transportation was sent to a favorable committee for local governments. While it was anticipated that the bill would go to Revenue and Taxation Committee, the bill was actually sent to Political Subdivisions. We will be working closely with that committee to ensure that they too understand the pitfalls of putting the local transportation district under the auspices of the state. It is likely that this bill will be heard early next week. Please stay tuned.

Also on Wednesday, SB-30 Creation of New School Districts passed the House and will be sent to the Senate for enrollment. The issue of creating new school districts still has several issues that need to be addressed, but the bill does establish an interim study item to ensure that those issues are resolved. This issue is quite contentious for several cities on the issue of who gets to vote when a district may be split into two smaller districts. As drafted and passed, the bill states that only the newly created school district gets to vote while the remainder of the existing district does not vote on the split. The issue of voting on the split will be the main topic in the months to come. Because of the split feelings among city leaders on the issue, the ULCT took a neutral position on the bill. We will, however, be watching the issue closely as it continues to be discussed.

That about does it for local governments on Capitol Hill for Valentine's Day. We will check back this afternoon with more information on Thursday committee meetings and schedules.

Here is the Schedule for Thursday, February 15, 2007:

House Revenue and Taxation--8:00 AM--Room W135

1. HB0383 Amendments to Transportation Funding Provisions (R. Lockhart)

2. HB0372 Local District Amendments (R. Lockhart)

3. HB0078 Property Tax Deferral - Senior Citizens (G. Froerer)

House Government Operations--8:15 AM--Room W010

1. HB0454 Voting Machines Used by Municipalities (N. Hansen)

Senate Business and Labor Standing Committee--8:15 AM--Room W015

1. HB0046S01 Disaster Recovery Funding (C. Oda)

2. HB0277S03 Construction Amendments (M. Morley)

House Political Subdivisions Standing Committee--8:30 AM--Room W125

1. HB0365 Eminent Domain Authority of Community Development and Renewal Agencies (S. Urquhart)

House Retirement and Independent Entities--5:30 PM--Room W025

1. HB0387 Post-retirement Benefits Restrictions (J. Dougall)

Sifting Begins in House and Senate

You can tell that the end is near when the bill sifting process begins. In essence, this process takes the bills that have been approved by a standing committee but have not yet made it out of the "legislative body of origin" and sends them all back to the Rules Committee, where they are methodically released for consideration before the entire legislative body. This process usually signifies the end to many bills, but savvy bill sponsors can still work diligently to ensure that important bills are considered by the body. Those sponsors that may not understand this process fully may suffer the ignominious fate of "death by processing".

For cities and towns, the sifting process did catch plenty of legislation that was close to consideration. Now those bills, to include SB172, HB334 and HB233 have all been sent back to rules and will await their ultimate fate. While it is likely that all three bills will be sent to the floor for additional consideration at some point, that "point" is still yet to be determined. As you can imagine, this is where the real negotiations begin as people beg to get issues considered. Interesting "horse trading" takes place, and it becomes very important to understand which issues are being used as bartering chips. Since we have a lot of outstanding issues such as the three aforementioned bills plus others to include HB-282 Sales Tax on Food Modifications, we need to be especially attentive during this time of the session. We will keep you posted as the REAL poker begins and the legislative process operates in its fullest glory.

Just as a reminder, please still contact your legislators on the important issues of HB282, HB334 and HB 233. If you need talking points on those issues please either contact League Staff or visit our previous posts on these issues.

Until next time....ENJOY!

Fortnight To Go!!!!

Another Monday on the Hill and another successful Legislative Policy Committee meeting. We had a spirited discussion about the future of the small school districts legislation and confirmed which legislators had been contacted by our city officials regarding HB 233 (Morley’s Environmental Zoning bill) and HB 282 (removal of food from boutique tax base). With attendance of well over 100, we took positions on several bills, including support of SB 215, Senator Bell’s modifications to LUDMA negotiated over the past year with League staff and the development community.

Also on Monday, he Senate Judiciary and Law Enforcement Committee rejected HB 255, Representative Neil Hansen’s attempt to restrict the use of any ticket quotas for law enforcement officers. The Senate also unanimously advanced the second substitute to Senator Carlene Walker’s SB 41, Municipal Forms of Government, to the third reading calendar. ULCT is supporting the compromise bill as substituted, which calls for an interim period without any government changes and a task force made up of legislators and municipal officials to study and clarify municipal forms of government.

It is only going to get busier as February 28 is just a fortnight away!

Weekly Legislative Update (Week 4)

Taxes

Outside of the much publicized Soccer/TRT Tax Discussion there is not much to say in terms of a weekly tax update. Things are somewhat on hold as we await the framework of the battle between the Senate and House. The primary issue will center on the size of any proposed tax cut. The next issue will be the composition of that cut. - sales and/or income tax. As we stated last week - the primary sales tax vehicle is the elimination of food from the specialty taxes. The ULCT has taken a position to oppose this legislation - HB 282 and we have requested assistance in conveying that message to the Senate.

Telecommunications
Regarding telecommunications issues. This week the Telco rate cap legislation moved out of committee with a rate cap of 3.5% which is down from 4%. This issue continues to be part of ongoing discussions about regulatory/franchise issues between the cities and various cable providers.

Land-Use
In terms of ULCT issues, land-use has consumed much of the week. The debate on Morley's HB-233 and Tilton's HB-334 has changed venues and several local government leaders are contacting their representatives on this issue. The bills are still pretty far down the reading list for the House, and will likely be heard next week. If you have not had a chance to learn about these bills, please see some of the previous posts where we highlight the ills of both pieces of legislation.

On a more positive note, Senator Bell's consensus based SB-215 Land Use Amendments Bill has also started to move. This bill address several issues that were raised during the interim by the League and several members of the development community. The bill essentially expedites the land-use appeal process in some circumstances and also institutes the notion of "fundamental fairness" into the Utah land use process. This bill should move fairly quickly through Senate -- and we will keep you posted on the progress.

Transportation
It has also been a slow week for much of the transportation discussions. With most of the transportation funding debate tied into the tax issues and the relative size of the tax cut, this issue will likely take shape as soon as the budget/tax cut discussion get underway. It will be another week or so for this issue. There have, however, been a few anti-UTA bills introduces this week to include HB-166. This is the bill that would take UTA and put them under the control of the Department of Transportation. With it getting fairly late in the session this bill may have a tough time, it will just depend on the tenor of leadership toward the largest Transit District in Utah. We keep you posted as this one moves along.

As you can probably see, the "hurry up and wait" game is well underway. The session is certainly beginning to take shape, but there is still a lot to be done in every major policy area. Please check back often for a status of these and other important issues.

Enjoy the weekend.

TRT Tax is approved for Soccer Stadium

While many of us assumed that the Soccer Stadium was flat-lined last week with the announcement that the County had no intention of approving a funding mechanism to assist in the Sandy project, we saw the living-dead once again walk at Capitol Hill. Yesterday, the Senate approved a proposal to dedicate portions of Salt Lake County's Transient Room Tax to purchase the land and assist with the construction of a parking facility that will be used by the soccer stadium. The bill passed out of the Senate 20-8-1 and will go back to the House for concurrence. In all likelihood the House will concur and soccer, once again, will be among the living. Outside of that news, very little happened in committee or on the floor regarding municipal legislation. Wednesday, however, will be a very different day as several bills will be considered in committee and on the floor.

We will keep you posted as the events unfold.

Enjoy.

Half-Way Mark for the 2007 Legislature

That's right, today marked the half-way point for the 2007 legislature. While the legislature may be physically half over, most of our work is yet to be done. As typical of the legislative process, most of the large decisions are being left for the waining hours. So far, it has been a fairly successful session for Utah's cities and towns as most critical issues have been resolved prior to committee hearings and floor debates, but that scenario is not fool proof. As has been mentioned in the last few posts, two issues dealing with a land-use matter in Mapleton city have plagued local governments this year, and have broken the trend of resolution prior to committee hearings. Both Tilton's bill dealing with condemnation for trails, parks and emergency access and Morley's bill dealing with zoning of sensitive lands (geological hazards) have passed out of committee and are now before the House for further debate. We have unsuccessfully opposed both bills in committee and now wait for them to be considered by the larger body. As we have said before, the multiple steps of the legislative process is geared to "kill" bills, and we hope that is the fate of both of these bills. We will be updating you on as these two issues work there way up the list for consideration. It will likely be next week before anything else happens.

Today was also a critical day for appropriations prioritization. Many subcommittees worked late tonight to finalize the appropriations requests that will be forwarded to the executive appropriations committee. Now that that step is behind us, we will likely see the budget take shape as the executive appropriations committee begins to sift through the requests and set the "legislative priorities". This is where most pundits assume the "discussions" between house and senate leadership will also begin to take shape and larger negotiations on the size of the tax cut and the viability of removing the sales tax on food will also be weighed. Stay tuned as this issue continues to mature.

On a final note, we will now also begin a more concerted effort to track bill progress as most critical issues are in the process at some point. This is where the juggling act begins as we are watching budget items, committee schedules in both the House and Senate and also watching floor schedules for both bodies. It is somewhat like the orchestra with a lot of separate parts all moving at once. Stay tuned as we turn down the home stretch.

Until next time....enjoy

Eminent Domain Evokes Emotion

While it probably doesn't need to be said, eminent domain is still an emotional issue for most people including members of the Utah State Legislature. Yesterday, local governments were dealt a small blow in the House Government Operations committee, where HB-334 was passed out with a favorable recommendation. The bill strengthens legislative language on the prohibition to condemn for recreational trails and emergency access. While the most offensive language was successfully struck from the bill, the remaining language is still troublesome for some communities in Utah. While this bill still has a long way to go before passage, it appears that the emotion associated with condemnation authority is still ripe and will likely drive much of the debate on this issue. If you wold like to read more, here is the Salt Lake Tribunes COVERAGE.

Local government was, however, successful in several other legislative committees. We were able to successfully delay a vote to lower the Telecommunications Gross Receipts Tax in House Revenue and Taxation. This bill has been linked to the issue of local franchise authority and a push by some of the telecom industry to move to a statewide franchise. The tax bill will be back in committee on Monday, where it is likely to pass, but the delay does provide some benefit in the negotiations that are taking place on the related statewide franchise bill. We will keep you posted on this.

In addition, we also successfully opposed HB-203 which would allow for a redistribution of the local option sales tax. The bill did not pass out of committee and will likely be modified prior to coming back for additional consideration. We will see what modifications are made, it does appear that the bill will eventually pass the committee, but as time continues to tick away, this bill is be harder and harder to pass this year.

On a final positive note, it looks like Rep. Bigelow has done his part to ensure that east-west transportation needs will be met in the western half of the Salt Lake Valley. He successfully passed HB108 out of the House, which allocates 1.5 million for a corridor study on the west side of Salt Lake County. Hopefully all of our West Valley and West Jordan readers take a chance to thank Mr. Bigelow. For more please take a look at the Deseret News COVERAGE of the story.

Until next time...ENJOY

Mapleton Resident Takes-Up Cause at the Legislature

In this one legislative session a Mapleton resident is directly responsible for at least 3 pieces of legislation that are devastating to municipal government, and unfortunately two of those bills will be heard today. We will be sure to update you soon after the committee hearings.

Here are the talking points from a municipal perspective on these two bills:

HB-334
Eminent Domain Amendments
Rep. Aaron Tilton
ULCT Position: OPPOSE

HB-334 redefines some “parks”, “trails” and “emergency access ways” to exclude any of these uses from the definition of a public purpose for which eminent domain may be used. The bill also requires an agency to condemn excess property by requiring the agency to condemn the property to the owner’s property line if the effect of the conceived condemnation would split a parcel of property. Lastly, the bill includes intent language that intimates that trails and parks as defined in this bill have NEVER been a public purpose for which eminent domain may be exercised – Which is categorically untrue.
ULCT Policy Concerns:

While a legitimate legislative discussion is warranted on the issue of condemnation for walking trails and parks, this bill is far over-reaching in an attempt to provide undue influence in pending litigation between ONE land-owner and ONE municipality. It would be an unhealthy precedent to use our legislative process to “trump” the due process procedures that are embodied in the judicial system. This bill is absolutely unnecessary.

The removal of eminent domain authority in this area last year has already impeded completion of trail systems in Washington and Utah Counties to include connectivity of the Bonneville Shoreline Trail in Highland and the St. George River Walk. The bill will also likely slow completion of the Jordan River Parkway in Salt Lake and Utah County.

Requiring local governments to condemn to an owner’s property line if a smaller area of condemnation is all that is warranted would foster the holding of excess property by local governments for unnecessary reasons, and shows a fundamental misunderstanding of Title 78. The law currently stipulates that we must pay severance damages if it is shown that a condemnation detrimentally affects the value of associated property – this portion of the bill is absolutely unnecessary.

The bill prevents local governments from condemning a right of way for emergency access – if the ability to respond to emergencies is not a public purpose what is?

The bill also falsely implies that the state statute has never allowed for condemnation for trails or parks as defined in this bill, which is just untrue. The sole purpose of this portion of the bill is to provide undue influence in pending litigation. It would be unhealthy to use statewide policy for single legal case that is born of spite. In addition, this section would reopen legal arguments in previous circumstance were eminent domain was used for trail and park systems.

HB-233
Environmentally Restrictive Zoning Districts
Rep. Michael T. Morley
ULCT Position: OPPOSE

1. HB-233 invalidates every geological hazards (landslide, unstable soils, floodplain, and avalanche) and wildfire protection ordinances in the state of Utah!

a. Lines 266-299 of HB-233 describe the method that all cities and towns must use to enact ordinances which protect public health and safety in environmentally restrictive zoning districts. Because the HB-233 method is new, none of the existing ordinances have been adopted according to the method and all would be invalid.

b. The new HB-233 method for enacting protective ordinances requires a city to prove through "compelling" means a need to protect public health and safety. This standard of judicial review will simply discourage many jurisdictions from regulating environmentally sensitive areas and will lead to a reduction in public health and safety.

2. HB-233 circumvents the work and findings of the Governor's Geological Hazards Task Force.

a. The Governor's Geological Hazards Task Force recommends greater enforcement of local land use regulation to prevent construction in geologically hazardous zones.

b. The Governors Task Force has offered drafted a model geological hazards ordinance and is developing training for local jurisdictions in the use and enforcement of the model ordinance.

c. There are no standards for geotechnical experts in Utah. One action item for the Governor's Geological Hazards Task Force in 2007 is to recommend standards for geotechnical experts in Utah.

3. HB-233 creates a lose/lose scenario for local government.

a. HB-233, changes the presumption of legality of local ordinances would allow any "competent professional", to trump local enforcement of geological hazards ordinances. Because there are no standards for "competent geotechnical professionals" these code lines will be the source of endless confrontation and litigation.

b. As newly subdivided lands slide and homes are lost as a result of this bill, cities (not the developer) will be sued by homeowners for allowing their homes to be built in geological hazard areas.

4. HB-233 is another attempt to settle pending litigation matters for Dr. Wendell Gibby.

House Government Operations -- Hard at Work

The House Government Operations committee has been busy over the last few meetings, and has been dealing primarily with the issues of municipal government. Late last week and early this week the committee sided with municipal governments and opposed legislation that would have required a public vote in any circumstance where a municipality is trying to dispose of a piece of real property and also would require annual audits of municipal bonds that are backed by private lease payments.

They will again be asked to support municipalites on Thursday as two critical pieces of legislation that will come before their committee. Unfortunately, we are again asking the committee to oppose bills. The bills in question are HB233 – Environmentally Restricted Zoning Districts and HB334 – Eminent Domain (regarding trails). Both bills are being run to benefit one disgruntled citizen in Mapleton, Dr Gibby, who has repeatedly lost legal battles with the city on issues regarding the use of his property. In fact, the case is still before the court of appeals and much of this legislation would apply retroactively to issues that he has lost in previous court decisions. We feel confident that the legislature will see the wisdom in allowing the legal process to take its course prior to stepping in on an issue where everyone involved has sided with the municipal government.

Fortunatley, the League of Cities has been able to solve most issues prior to reaching the House or Senate Floor. We hope the trend continues, as it is always easier to resolve issues in smaller settings prior to the larger debate. We will keep you posted on our progress.

Sales Tax on Food Revisited - A City Perspective

As promised in an earlier post, here are some additional thoughts on the removal of sales tax on food -- this time from the municipal perspective:

Tax Cuts or Revenue Substitution

The impact on government revenues will be determined by whether the policy decision is to simply cut taxes or whether there would be an attempt to mitigate the loss by imposing an offsetting tax burden. The impact on local governments is different than the impact on the state because of the individual economic factors of individual cities and towns.

Municipal Impacts

The term “revenue neutral” is rather casually employed when discussing revenue offsets. The most-commonly discussed means of achieving “revenue neutrality” is to increase the tax rate on non-food items sufficiently to achieve the same revenue as existed with food in the tax base. In truth, this objective may be achievable in the aggregate (overall city sales tax revenues). However, on an individual city basis the revenue neutral goal is much more problematic. Critical to the determination is the fact that food represents a different component in each municipality’s tax base. Furthermore, some communities have the capacity to export more of their tax obligations than other cities.

Simply put, an increase in the tax rate will result in a tax windfall for some communities and would likely result in a shortfall for others. It would be possible to create some type of “hold harmless” mechanism that would share the additional revenue from the increase from the winners and losers. However, hold harmless efforts are not look upon favorably by the legislature. I think that it is fair to say that any type of “hold harmless” would be relatively short-term and purely transitional.

Of course it is mathematically possible to increase the sales tax sufficiently to ensure that there would be no losers. Such an outcome is not likely from a political standpoint, however. I would summarize the likely impact on cities and towns as follows.

1. Any change in the 1% local option would politically require some revenue offset. The most likely approach is a rate increase in non-food items. Last year’s proposals as an increase from 1% to 1.1%.

2. There would be winners and losers with such an approach. The losers’ situation could be mitigated by a transitional hold harmless proposal.

3. Municipalities that have a relatively large number of grocery stores or other food sale outlets would in the long-term see a reduction in sales tax revenues from what they would have been if food had remained in the base. Conversely, cities that receive sales tax from a more diverse retail base would benefit.

There should be some mention about the unique nature of some Utah communities that have a high degree of export potential in their tax base – namely tourists. In general these cities and towns rely more heavily on the sales tax than most other communities. In some cases, Utah law has authorized a specific sales tax levy, the resort community tax for example, to reflect the unique nature of their situation. A rate offset would likely need to be significantly higher for these communities than for most other locales.

Lastly, in some cases communities may have incurred bonded indebtedness associated with their sales tax revenue. Because of the sensitivity raised by this issue last session I want to emphasize that the existence of this indebtedness does not mean that the legislature may not ever change the tax base. However, the removal of food from the tax base is not a small change and its impact is not the same across all communities. Therefore, the impact of eliminating food from the base and replacing it with a rate increase offset may not cover the indebtedness in every situation.

Simply put, Utah cities and towns have used the sales tax as a significant revenue source for nearly 50 years. Reliance on the sales tax has increased significantly in the past 15-20 years. The result is today sales tax represents the major revenue source for most Utah municipalities. Removal of the sales tax on food would represent the single largest adjustment to the sales tax base in recent memory and merits careful understanding of both the policies and impacts.

Have any thoughts on the issues -- We would love to hear about them please feel free to comment.

Now on to other legislative items. Here are the agenda items for early next week. We hope to see many of our local officials on the hill for some of these important items.

Until next time...Enjoy

Cops, King George and Municipal Government

Yeah, its a strange linkage but its all in a day's work at the Utah State Legislature.

Cops

Today, the House Law Enforcement committee considered HB-255 Prohibition of Citation Quotas by Representative Neil Hansen of Ogden, which would prohibit local police departments from using any ticket "quota" system for police performance evaluations. The bill, which was written fairly broadly attempts to target specific daily quotas, but would also prohibit police departments from using any ticketing information to evaluate police officers. As you can imagine may local police departments testified in opposition to the bill. The bill did, however, pass the committee by a one vote margin and is now on its way to the House floor for further consideration. The Utah League of Cities and Towns, Police Chiefs, Sheriffs and Association of Counties will all be working together to oppose the bill on the House floor. Stay tuned on this one.

Now moving to King George

Yes, is excellency was actually invoked during a committee debate today regarding the splitting of school districts. SB-30S1 Creation of New School Districts sponsored by Senator Carlene Walker of Cottonwood Heights would allow portions of an existing school district to split out of that school district and create a new, smaller district. The bill is fairly nuanced, covering issues such as asset distribution, interim school boards, and the process for actually proceeding with the split; but the issue that received the most attention in committee today was the voting aspect associated with the split. The argument centered on whether the entire district should be allowed to vote on the split or just the portion requesting to split. And that is when it happened, during the testimony an individual representing the City of South Salt Lake and arguing for the voting to remain solely with the splitting faction asked if the 13 colonies would have been created if all of England and King George had an opportunity to vote in the Declaration of Independence. While you may scoff, the argument, buoyed by others testifying in the same vein, carried the day and the committee passed the bill out with the provision which only allows the splitting portion of the school district to vote on the creation of the smaller school district.

It is unlikely that this debate is over, and it "splits" right down the Jordan River in Salt Lake County, where most "east-side" communities support the idea of only allowing the splitting portion to vote, and most "west-side" communities supporting and idea that would require the entire district to vote on the split. At this point the ULCT has not taken a position on this aspect of the bill, but our Policy Committee did support the original legislation which allows cities to initiate a split in the current school districts. Fortunately, Senator Walker has expressed willingness to sit down with all interested parties to find an amicable solution for all involved. As you can imagine, the ULCT will be watching this one closely as it moves through negotiation and the legislative process in general.

And Additional Items for Municipal Government

In addition to the committee hearings, today marked the first milestone in the 2007 legislature. It was the last day that a bill file can be requested by a legislator. As such, tomorrow we should see a much longer list of "requested" bills. Once we have a chance to peruse the comprehensive list we will begin posting/tracking all of the municipal legislation on this website and our homepage www.ulct.org.

Please check both places for tracking and update information.

Until next time....Enjoy

Food Sales Tax Bill Now Sits Before Senate

Today HB-282 Sales and Use Taxation of Food and Food Ingredients passed the Utah House of Representatives and now awaits action in the Senate. The bill passed the House without much fan-fair, which was to be expected, but the road will likely be much rougher in the Senate. With the size of the fiscal note, the bill will likely be on hold for quite some time while other budget related negotiations continue between the two bodies, and this bill is likely to be a significant bargaining point for both.

Traditionally the Utah League of Cities and Towns has opposed efforts to remove sales tax on food due to the significant impacts that such a change could have on our cities and towns ability to provide essential services. This year, however, the Speaker of the House has initially entertained various ideas to make up lost revenues, and several of our most heavily affected municipalities are still gathering information on the "exact" impact such a change would have.

As you can imagine, this is a significant issues for many local governments and it is likely that a definitive course of action will be established by the ULCT within the next few days. In the meantime, here are a couple of thoughts on this issue.

General Tax Policy

The basics of tax policy theory would argue against exempting food from sales taxation. Classic economics would support broadening the sales tax base and using as low a rate as possible in order to generate adequate revenue. Indeed, the primary concern of all studies of the current sales tax base is the increasing narrowness of the base and the absence of economic activity that is not part of the system – particularly services.

Essential purchases present a particular question since by their very nature they constitute the most stable component of the sales tax base. In short, they are somewhat recession proof. Given the inherent fluctuation of the tax system concerns over stability are legitimate. This fact is an increasing concern for Utah municipal finances as we have shifted so heavily to sales tax as a funding source. Clearly the elimination of food from the tax base increases fiscal instability – it is however, a fair question as to what extent the system instability would actually be impacted.

Systemic Fairness

Given the fact that “good tax policy” would argue for including food in the tax base, why is it that most states do not tax food and there is generally clear popular support for its removal? The answer lies in the debate over such terms as “tax fairness” and the “morality” of taxing essential purchases. These terms are also highly subjective. Furthermore, the popularity of such an exemption is obvious. The following information addresses these issues in more detail.

Regressivity

There are three classic terms used to describe the relationship of taxes and income: regressive, progressive, and proportional. The term “regressive” means that as income increases an individual’s tax obligation in percentage terms decreases. Conversely, “progressive” means that as income rises the tax obligation in percentage terms also increases. Lastly, “proportional” means that an individual’s tax obligation stays constant in percentage terms as income changes.

Virtually all flat rate taxes, particularly consumption taxes, are inherently regressive – the tax burden in percentage terms decreases as income increases. Individual consumption patterns are such that although consumption increases with additional income it usually does not increase as much as income does. In other words, regardless of how rich you are there is only so much you can eat. Yes, you may eat different things but overall the money spent on food does not relate proportionally to income increases. As such, the tax obligation decreases in percentage terms in relation to income – the definition of a regressive tax.

Traditionally modern society has generally been somewhat troubled by the concept of tax regressivity. Even if there was skepticism of progressive taxes, there was not broad public support for actually reducing the percentage tax burden as income increased. Nonetheless, that is the functional effect of flat-rate consumption taxes.

There have been various approaches to addresses regressivity. One of the more common approaches is to eliminate some essentials, such as food, from the sales tax base. In other words, the value of not taxing food is much greater to a lower income person than a wealthier one. The result of the elimination is to reduce an aspect of tax regressivity from the system. The challenge, however, is that this elimination is very expensive. The reason for the hefty price tag is that all consumers, regardless of income, receive the benefit.

This high cost has caused some other states (although clearly a limited number) to address the impact of regressivity through other means such as an income tax credit or by increasing the progressivity of other taxes such as the personal income tax.

Morality – Essentials should not be taxed

This argument is completely philosophical and should be analyzed as such. The underlying assumption is that there are certain purchases that should be removed from the tax system because of their unique, essential nature. There are legitimate questions, however, about what is or is not an essential purchase. This argument needs to be assessed against a countervailing premise that all citizens should pay something for the operation of government. That goal can be accomplished if in fact essential purchases are taxed.

One item that should be noted: The original food exemptions that were incorporated as part of the first sales tax systems – usually in the 1930’s - were associated with the purchase of raw food stock. Most meals were prepared from scratch at home from raw ingredients. Today, most meals involve some element of pre-packaged food. One can therefore ask the question about why a pizza delivered to a home is fundamentally different in moral terms from a frozen pizza that one merely puts into a microwave. With the food exemption the frozen pizza is exempt and the delivered pizza taxed.

Note: One question that is often raised concerns the definition of food – what qualifies as an exempt food purchase. The work of the national SST committee has resulted in a national definition of what qualifies as an exempt food purchase. However, the fact that there is definitional uniformity does not mean that there is not still some very strained line-drawing. This line-drawing results from the ever-increasing number of food items that are bought in various stages of preparation for consumption.

Assistance to the Poor/Everyone should pay something

Associated with the “morality” argument are concerns that the current tax system overall is somewhat harsh on lower incomes. There is some legitimacy to the argument that the current Utah system overly burdens some income groups in relations to others. The removal of sales tax would indeed mitigate some of this impact. One question is what is the cost of this removal and how would the benefit be distributed?

Because the removal of the food sales tax impacts everyone regardless of income the majority of the benefit will inevitably go to the non-poor. As a means of assisting a particular income group, the removal of food is a rather blunt instrument – everyone receives the benefit regardless of income. The counter-argument is that the removal of food sales tax is simply a tax cut for everyone – but has the added benefit of providing a more valuable impact for lower income categories.


The assistance to the poor argument is often rebutted by the position that every resident should be required to pay something for government services. The sales tax on essentials, such as food, ensures that some tax obligation is imposed on virtually all citizens. This position has taken on some added impetus because of concerns over illegal immigration.

By some measures this position is mitigated by the fact that there would still be essential purchases required other than food that would be subject to taxation. Furthermore, there are still taxes embedded in the price of other commodities such as rent that are paid by consumers – even though these payments are indirect. Nonetheless, the taxation of food does have a much more direct result of imposing a tax on all residents.

Another argument uniquely applicable to Utah is associated with family size. There have been those who have argued that a “head tax” should be imposed because of the impact of large families on schools and other related services. For a variety of reasons the imposition of a head tax has been rejected by Utah policy makers. However, it can be argued that the sales tax on food is a near-perfect substitute for a head tax given the disproportionate impact on larger families.

And now you may be asking about the municipal specfic pro's and con's of such a proposal. That information will be available on our next post -- please check back tomorrow.


-- Enjoy

The Telecom Debate Has Started

It is about 6:15 on a Tuesday evening and the first formal debate on the "Statewide Telecommunications Franchise" Bill has just concluded. All of the interested parties to include Comcast, Orange Cable, Broadweave, Qwest, AT&T, the Utah League of Cities and Towns, the Department of Commerce and the Association of Counties all sat around the table to discuss the intricacies of municipal franchise arrangements. As can be imagined, with a group of this size, very little was accomplished but at least we have staked out our proverbial "territory". Senator Bramble will be hosting several of these forums in the near future to determine if a compromise position can be attained -- We will see where that goes.

The ULCT has consistently held a policy position to ensure that all communities have telecommunications and cable options for their citizenry. This tenet is often gained through effective local franchising arrangements that ensure fair telecommunications competition and basic service to all residents within the city.

The major issue in franchising deals with local government “build-out” requirements in some cities and towns. These franchising arrangements require incumbent and new telecommunications providers to provide, or have a plan to provide, telecommunications services on a city-wide basis. While not all cities require build-out, some cities feel that these requirements are critical to ensuring service to all residents within the city while maintaining a fair and competitive telecommunications market.

Since the Utah League of Cities and Towns has been consistently involved in telecommunications issues ranging from the transition from the old franchise arrangements to the new Telecom Tax as well as issues such as UTOPIA and iProvo, we would like to continue to be a part of the dialogue on this important issue.

Our basic philosophy is to maintain local government autonomy on franchising arrangements so that we may effectively ensure a fair and comprehensive telecommunications environment in our communities.

We will be providing consistent updates on this issue as the legislature continues.

Taxes Will Likely Consume Utah Legislature

Taxes:

There will be a large tax cut but at this point the Governor/Senate/House are all playing poker as to the size and composition of the cut. The House has proposals for a cut of nearly $300 million. The Governor has proposed a cut of $100 million. The Senate has yet to play a figure. One challenge is that most of the "surplus" money is in the income tax. This fact means that the cuts are likely to be primarily in the income tax or the state minimum property levy.
There are a number of rumors and other guessing regarding tax changes that could impact cities and towns. Those receiving the most serious discussion involve the "boutique" taxes (resort community,ZAP, special transit taxes). The Speaker would like to remove food from the tax base for these taxes. The result is more serious discussion about shifting some of these taxes to a property tax levy. The net impact is a resurrection of the single-sales tax proposal floated in previous sessions. These discussions will be ongoing but it is fair to say that there is more impetus behind them now than in prior years.

Telecommunications:
In some ways this area is also a tax issue since it involves the municipal telecommunications tax. However, the broader subject area also incorporates the concept of a state-wide franchise for cable television. Our cities and towns have been on notice for several years that a downward adjustment on the rate cap was coming. It is currently 4%. We have indicated that a 10% (3.6%) cap cut is "swallowable". However, there are others that may be pushing for a greater cut.
Enter the franchise issue. Qwest and others are pushing this concept which would alter the role of cities in granting operating franchises to cable companies. When all is said and done the primary issue is that of "buildout" or whether a new cable company can be obligated to serve an entire community as a condition of operating in a city. This is an issue since prior franchises have imposed the buildout requirement on companies such as Comcast. We have had cities take conflicting positions on the buildout questions and have to date asserted that this issue one of individual city choice. However, the FCC recently issued an order which would restrict city choice in this area and there are varying opinions about if and how Congress may address the issue.
Like it or not discussions on the rate cap and the franchise authority are going to be related if not linked.

As you can imagine, these are not the only issues before cities and towns this year in the Utah legislature -- expect more to come in future posts.

-- ENJOY

Utah Local Officials Head to Capitol Hill

Well, kind-of. Since the construction crews are still putting the finishing touches on the renovation of the Capitol, we invited the legislature and Utah's local government officials to a meeting "off the hill". Nearly 500 local elected officials and youth city council members made the trip to Salt Lake City to meet with there legislators at the downtown Sheraton Centre, where they got a brief preview of legislative agenda for 2007.

In addition, we showed a video which clearly demonstrates how little our constituents know about government in general. The video was fashioned after a Jay Leno "Jay Walking" segment, where we asked elementary civics questions to Utah residents. In typical "Jay Walking" fashion we were not surprised at how little Utah citizens know about basic civics. We, as the League of Cities, hope to help in the education process by kicking of an extensive Public Information Campaign on the issue of civic engagement and the role of local government in Utah. Please look for it in the coming months.

If you attended and wish to see the video again, please check the ULCT blogs regularly. We will be getting it put on the web soon for your viewing pleasure.

Our event had several notable guests including Speaker Greg Curtis, President John Valentine, and Governor Huntsman, who all joined us to learn more about the issues affecting local government. On the whole it was a very successful day for local government. With the great turn-out for this event the message was sent loud and clear – WE CARE ABOUT THE VITALITY AND VIABILITY OF OUR COMMUNITIES. Thanks to all who attended.

In terms of actual legislation, today was fairly uneventful for municipalities at the Utah State Capitol. While the negotiations on large legislation is well underway, we fortunately had nothing of note in committee today for consideration. It also looks like a fairly lite committee day for Thursday as well. We should, however, start seeing several municipal bills in committee starting early next week and as soon as those schedules are available we will post them on the BLOG.

Until next time -- ENJOY

Lobbying 101 -- The Golden Rule

Over the past few weeks I have been asked to speak to a few association groups on the issue of citizen/association advocacy and the in's and outs of the legislative process. After completing the circuit (okay, so I had dreams of the speaking circuit as a youth), I realized that I had probably internalized most of this information, but had spent little time conveying this same information to our Utah League of Cities and Towns membership. So, with that being said, here are a few critical points from the lobbyist "creed"-- according to Lincoln

• Understand that politics are in play: Often times association groups and citizens rely solely on the policy positions in which they espouse and forget that politics are definitely in play. Now that shouldn't be taken as a criticism of the process, but more a statement of fact. As has been reported recently in the print media, our legislature is dealing with Senate/House/Executive dynamics that can often surround our issues. We also forget how individual legislators are dealing with several issues, which are often intertwined by several factors to include: Past experience with the advocacy groups, sponsorship, appropriation requests, etc. -- The job of a lobbyist is often to see how the "dots" connect and determine how to use that knowledge to their benefit.

• Respect a Legislator's Time: It is a very busy 45 days, so the best policy is to be concise and to the point. It is often best to make series of contacts, whereby information can be left with the legislator and you can then follow-up at a later date to answer any questions or address any concerns that are expressed. "Single-Shot" lobbying rarely, if ever, works.

• The art of compromise: By our very nature, most of us wish to avoid conflict -- thus compromise is at the very core of the legislative process. Legislators are generally looking to balance interests. Be willing to compromise, but at the same time, maintain a firm understanding of what it is you are trying to accomplish. Don't let "winning" get in the way of achieving your objective.

• Incrementalism: You are in this for the long-haul. Remember that the theory of incrementalism is your friend and be willing to take the little "wins". Be willing to work slowly but methodically to achieve your goals and remember that it may take several years to get there.

• Plan for the Win-Win: Attempt to make your proposal an win-win situation for both you and the legislature. Long-term thinking is key this process. Inevitably the legislature will meet again, and you will likely be looking for assistance from this group in the future as well. Attempt to align interests and educate versus simply winning once.

• Find Friends: It is always best to broaden your base of support. Consider whose opinion can also influence the process: Colleagues? legislators? politicians? other interest groups? and then use those resources in your lobbying efforts.

• Never Get Defensive: Just because a legislator is asking questions does not mean they are coming after you. Utilize this opportunity to educate and reiterate your perspective. It is best to understand why those questions may exist and proactively address the issue versus becoming defensive and reacting as such.

• Maintain Contact Throughout the Year: If you only contact a legislator when you need something then you don't have a REAL relationship. Build legislative relationships that are deeper than simply asking for favors. People will get tired of you if they feel that you are only in this for yourself. Ask how you can help versus always asking for the favor.

• Honesty: The one fundamental key to lobbying is to gain and maintain trust. If you expect people to rely and value your opinion they must trust you -- and people have a long memory when it comes to this issue. Integrity and Honesty is one of the only commodities you have to offer.

Hopefully this information is useful, and we hope to see more of you on Capitol Hill

--Enjoy