BOUNTIFUL - MAKING CHURCHES & SCHOOLS PAY
During Bountiful's recent budget hearing, CitizensforTaxFairness.org questioned why, while continually raising power rates, the city continues to transfer millions of dollars from the power fund to the general fund.
It appears that the city’s rationale is that the transfers are a way of making non-profit, tax exempt groups such as churches, the American legion, schools, the food pantry, and service clubs pay for the services the city provides them. In addition, it allows the city to collect money from renters who, according to city officials, do not pay property taxes. (Renters may disagree with this assertion).
In the Budget Message to the Mayor and City Council dated June 14, 2005, Bountiful City Manager Hardy explains:
"Part of the reason that taxes have been kept low as they are is the annual contribution from the power fund to the general fund….[The transfer] provides for revenue from tax-exempt entities such as schools and churches, which help pay for services such as police, fire and streets. In addition, it provides revenue from multi-family rentals where the occupant does not pay property taxes."
In a subsequent letter to the editor, Mr. Hardy further explains: "As city officials, we believe an appropriate way to keep property taxes low for homeowners is to obtain a return on the power system similar to what Utah Power returns to their shareholders, and what is allowed by the Public Service Commission. This money stays in Bountiful to pay for city services rather than being paid to outside shareholders.
In essence, the citizens are the shareholders of Bountiful Power and thus are receiving revenue (and a return) from sales of power to renters, businesses, and tax-exempt properties that pay little or no property tax."
CitizensforTaxFairness.org wonders just how fair it is to raise electric rates while continuing to transfer millions of dollars from the power fund to the general fund? Is it fair to indirectly tax non-profits who are financially supported by Bountiful citizens and to arguably double tax renters? Is it fair to make citizens on fixed incomes or young families trying to buy their first homes pay higher power rates so multi-million dollar power fund transfers can continue? And are these transfers really necessary, when Bountiful has adequate funds to lend millions of dollars to other taxing entities in order to expand the new recreation center?
CitizensforTaxFairness.org also wonders just how long the city can continue to raise electric rates now that Bountiful Power's rates are roughly equivalent or a little higher than those charged by Utah Power and Light which must not only provide a true return to shareholders but also pay taxes?