by Howard Stephenson
Taxpayers in Bountiful, West Bountiful, Centerville, North Salt Lake, and Woods Cross are being asked to support a tax increase to build and operate an extravagant government-owned and operated recreation center. Taxpayers need to know why this is a very bad idea.
Two years ago Davis County Commissioners threatened taxpayers with a 138% property tax hike. The public hearing on the tax propsal turned out thousands of taxpayers protesting the tax increase. Although the County Commission listened to taxpayers and reduced the tax hike dramatically, it seems this was only the beginning of local government’s assault on Davis County taxpayers. Other tax increases are already on the way:
- A RAP tax increase that will increase annual sales tax burdens by $3.2 million per year
- A new county jail that will cost taxpayers several million dollars a year in new property taxes
- A new school district tax that will increase property taxes by $1.3 million per year.
Bond elections should be held in November, not in August when people are not paying attention.
Local governments hold bond elections in August for one reason: to minimize voter turnout so that small special interest groups can have a disproportionately large impact on the election’s outcome. Fortunately, the Legislature voted to ban these off-season, low-turnout elections, but the ban does not become effective until later this year. It is disengenuous for the county officials to slip this issue onto the last August election allowed in the State of Utah instead of waiting for the November general election.
Tax Impact on Property Owners
Taxpayers are being asked to support two tax hikes: one to cover the construction costs of the recreation center and a second tax hike to operate the recreation center. Taxpayers are being asked to subsidize 100% of the construction costs and 25% of the operating costs. The construction costs would be covered by an $18 million bond and an additional $5 million from Bountiful City and Davis School District.
The impact on a $200,000 home would be $44 annually and the tax on a $200,000 business would be $80 annually.
Reasons to Oppose the Bond
Utah has pressing education and transportation needs that must be addressed. Government spending must be prioritized. The state and local tax base must be utilized efficiently. Government must distinguish between must-haves and nice-to-haves.
Over the next ten years, Utah’s public school enrollment will increase by 145,000 students, a 30% increase over current enrollment. Utah will also need to spend billions of dollars in expansions to transportation infrastructure. This will impact taxpayers in Davis County since local taxpayers are also state taxpayers.
Funding education and transportation are essential government functions. Without adequate transportation and education systems, all taxpayers suffer immensely. Recreation, however, is not a critical government function, and government should allow the taxpaying private sector to address these activities.
Recreation expenditures by state and local governments in Utah as a percent of personal income are already 50% higher than the national average. State and local governments need to focus on what really matters: education, transportation, and public safety.
Government cannot do everything. President Bush stated “Government should focus on a few things and do them well.”
Utah’s state and local tax burdens are already 7th highest in the nation. Experience in the U.S. and throughout the world demonstrates that higher tax burdens lead to lower long-term economic growth.
Real, per capita economic growth occurs when businesses and individuals are allowed to invest in capital, processes, and people. This increases productivity which is the ultimate driver of economic growth.
As taxes increase, businesses and individuals have less money to invest and expand the economy. Moreover, as state and local taxes increase, local companies that export products to other states and countries, become less competitive against their out-of-state rivals.
Government should not compete against the private sector.
If approved, the proposed recreation center, which will have a 2,400 square foot weight room, a 6,000 square foot fitness area, and 2,400 square foot aerobics area, would compete directly against the private sector.
Government competition against the private sector poses two problems. First, government has unfair tax advantages compared to the private sector. Private gyms pay sales taxes on purchases of tangible personal property such as exercise equipment and weights and property taxes on real and personal property. Government recreation centers do not pay these taxes.
Government gyms require taxpayer subsidies for construction and operation while squeezing out the taxpaying private sector. This results in higher taxes for everyone as government is forced to cover higher expenditures with lower tax revenues.
Extravagant, nice-to-have amenities for the minority should not be subsidized at the expense of all taxpayers.
The proposed recreation center is more than a swimming pool so the children can learn to swim. The proposed center is extravagance personified and includes three full size basketball courts, Olympic –size ice arena, indoor climbing wall, aerobics and dance studios, racquetball courts, fitness center, weight room, indoor walking/jogging track, indoor 12-lane competition pool, indoor recreation pool, and an outdoor recreation pool.
Subsidizing extravagance for a minority while so many needs that impact the majority are not addressed does not make sense.