Ever since the passage of Truth in Taxation laws in 1985, the Utah Taxpayers Association has battled back countless attempts to weaken it, erode it or repeal it. As the Legislative interim season begins in 2023, a new idea is surfacing that would be yet another attempt to circumvent transparency and restrained government spending and burden taxpayers under a new pile.
This new idea comes with a nice, soft sounding title – Transportation Utility Fees. It is a proposed study item in at least two interim committees in 2023.
After a recent Utah Supreme Court ruling in Larson v. Pleasant Grove City, 2023 UT 2, the court has opened the door for cities and counties to now go around the accountability and transparency that is required in Truth in Taxation (TnT). Under TnT cities and counties are allowed to raise taxes, but they must justify that decision to voters with a public hearing and notices sent to taxpayers.
However, after Larson v. Pleasant Grove, cities and counties could be authorized to impose fees for any government purpose in Utah, including roads, police, fire etc. This movement started in 2018, when Pleasant Grove City passed an ordinance imposing a Transportation Utility Fee (TUF) on city residents and businesses to pay for city road maintenance. A lawsuit was filed, arguing that the city had no authority to impose the TUF. Recently, the Utah Supreme Court ruled against the plaintiffs and found that the TUF was a fee authorized by the Legislature.
Unfortunately, this opens a Pandora’s Box for cities and counties to go down a very dangerous road. For the past 126 years, local governments have found ways to fund their needs by imposing general fund taxes and adding on fees for specific individuals receiving specific services that do not benefit society at large (i.e. document recording fees or garbage pick-up). Now, with this ruling local governments will have little motivation to spend taxes wisely and tighten belts when needed. Conversely, they would now be motivated to do the opposite – to spend all general funds and then argue that funding has dried up and claim they are justified in imposing a new road, police or fire “fee” to make ends meet.
Utah could soon walk down the very same path that Colorado has gone. Colorado is now a quagmire of different tax rates and tax bases in every city. Under their “home rule” system cities possess independent authority to impose their own taxes and the consequences of such a terrible policy has only benefited government largesse and accountants and attorneys that need to be hired to sort through the mess.
Action is needed in short order to make sure Utah does not jeopardize the taxpayer friendly environment that has the Beehive State ranked #1 amongst states in virtually every category. Legislation should be enacted to curb any usage of TUF’s in Utah. Your Utah Taxpayers Association will be making this a top priority.