TAX NEWS - June 2010

Double taxation - again

Few issues along the Wasatch Front have the staying power of the cry of "double taxation!" Deedee Corradini used it in her successful run for Salt Lake City mayor in 1991, arguing that city residents were paying both for city and county paramedic services. We wouldn't be surprised to learn that Brigham Young once had to deal with the issue.

And now it is back again.

Salt Lake City claims its residents should not have to pay taxes both to the city for its hazardous materials, arson and bomb investigation crews, and to the county for the exact same thing. Salt Lake County is standing firm, calling the city's complaint just a sneaky way to settle its own budget problems. Both sides say they are anxious to talk things out, but the city is being clear that it may pursue litigation if an agreement isn't reached.

City officials say their residents pay more than $1 million a year for these county services, even though the city provides them on its own. Going back to 2006, the start of the Unified Fire Authority, city residents have been double-taxed $4.9 million.

The fact is the city is correct. Its residents do indeed pay twice for the same thing. But that's not where the debate should end. Both sets of services act as redundancies for each other in cases that often pose threats to human health and safety. A prime example is the oil leak that fouled Red Butte Creek in the city last weekend. City crews responded immediately, but county crews were there quickly as a backup. Should there be a price for redundancy? Or would it be better if the county simply sent a bill to the city after each instance in which it had to respond within city borders?

The Wasatch Front is a collection of local governments that border on each other, which sometimes makes a strict delineation difficult. Neither criminals nor disasters necessarily confine themselves to one jurisdiction. A burglar may strike in several different cities before being apprehended in one, whose police department bears the brunt of the cost.

At the same time, people here do not confine themselves to one spot. A resident of Sandy may shop in Murray, leaving his sales tax dollars there, and he may work in Salt Lake City, where his labors help pay property taxes. Likewise, that same Sandy resident would rely on Salt Lake City police to respond if he were robbed or involved in an accident downtown, despite not living within that city's boundaries.

Salt Lake City holds the upper hand in this argument. Courts have previously ruled against double taxation, and the cities and county have resolved other duplicative efforts through the years. But a fairer system would involve a more regional approach to these services.

We're glad both sides are willing to talk. They need to resolve this issue in a way that recognizes fairness is not always a black-and-white matter.