Salt Lake City Mayor Jackie Biskupski proposes half-penny hike in sales tax to fund housing, transit and road plans

(Rick Egan | The Salt Lake Tribune) Salt Lake City Mayor Jackie Biskupski gives the State of the City address at the Horizonte Instruction and Training Center on Wednesday.

Salt Lake City Mayor Jackie Biskupski proposed a half-penny city sales tax increase to help fund initiatives on housing, transportation, road repair, public safety and the environment in her third State of the City address Wednesday.

The $35 million in projected additional revenue from the half-percentage-point increase, which the mayor noted was equal to a nickel for every $10 spent, could be paired with $87 million in new capital investment if voters approve a bond this year. The mayor said borrowing of that size would cost about $5 annually per household.

“For the first time, Salt Lake City has a robust transit master plan, a housing plan and an in-depth understanding of our infrastructure needs,” Biskupski told a crowd of 300 people at the Horizonte Instruction and Training Center, a nontraditional high school. “We have a clean energy plan, with goals focused on helping us preserve the water, land and air.”

She added: “These funding options create a unique opportunity to fully implement these plans, giving Salt Lake City the ability to control its own destiny. With all of this in place, now is the time for us to fully invest in the future of our city.”

The city’s sales tax is 6.85 percent. The Legislature cleared the way for a possible tax hike in 2015, when the state was deciding where build a new prison. Lawmakers voted to give the eventual host city optional authority to raise its sales tax. A site in Salt Lake City was selected that August.

Unlike the bond issue, which would require majority approval by voters, the tax increase could be enacted with the support of the mayor and the OK of the City Council, although the mayor pledged an outreach campaign to “gauge the public’s interest in activating this sales tax option.”

The mayor laid out her case for the increase in the first half of her 34-minute speech, noting affordable-housing initiatives approved last year and the approved transit master plan that aims to address longstanding gaps in local service.

She cited a 5.8 percent drop in city crime in 2017 over the previous year and highlighted the 50 new police officers who are to be hired this year, in part to relieve resource and staffing burdens stemming from the ongoing Operation Rio Grande anti-crime push.

On the plus side of the ledger, she cited efforts by the economic development office she created to attract what she said was nearly $1 billion in capital investment and new businesses that will create 6,000 new jobs. She noted new solar installations on city facilities, new city-funded charging stations for electric vehicles, and plans to replace century-old water and sewer lines on 1300 East over the next two years. The water lines serve more than half of city residents.

And she cited what could be a $200 million, 10-year investment to repair the city’s roads. A study last summer found that two-thirds of the city’s street grid was in poor condition or worse.

After the speech, City Council Chairwoman Erin Mendenhall said the sales tax increase was a “very attractive option,” given the city’s needs and tax options. The council is expected to begin public discussions on the matter next week.

“There is no other revenue stream,” she said, “that we will be able to consider that draws taxes from everyone who comes to Salt Lake City, not only our residents, as a property tax increase will do.”

Fourth District Councilman Derek Kitchen said the new tax revenue would allow the city ”to not only catch up on almost a decade worth of deferred maintenance on our roads but to start addressing serious issues like air quality through transit, and potentially housing and public safety as well.”

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