Lawmakers to fix gas tax revenue dispute among Utah cities, counties

Lawmakers to fix gas tax revenue dispute among Utah cities, counties

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SALT LAKE CITY — Utah lawmakers will likely meet in a special legislative session next month to fix for the second time a formula that distributes gas tax revenue among counties and cities.

The Utah League of Cities and Towns and the Utah Association of Counties told the Legislature this week that they have worked out a solution after months of negotiation.

"Everyone has agreed to it," said Lincoln Shurtz, counties association government affairs director.

Cities and counties were promised a 17.5 percent increase in road funds as a result of the Legislature raising the gas tax by a nickel in 2015. But some of them were actually losing money under the complicated system.

In fact, 11 rural counties that received less than 1 percent growth per year in transportation funding over the 20 years since lawmakers last raised the fuel tax lost a total of $2 million.

The Legislature tried to correct that in a bill earlier this year that would have given those counties a 100 percent increase in revenue to reflect the amount the transportation fund had grown since 1996.

But in catching those counties up, there would have been a $10 million shift in funds away from the Wasatch Front. Cities objected, citing a different interpretation of how the revised formula works.

"There was a grand disagreement on what the cleanup (bill) was supposed to do. When the bill was implemented, different expectations and different results occurred," said House Speaker Greg Hughes, R-Draper.

Hughes said it could have "blown up" the initiative, pitting the Wasatch Front against rural Utah, which he pointed out has a lot fewer legislators.

"We did not want this to be a political solution amongst lawmakers," he said.

Legislative leaders told the Utah League of Cities and Towns and the Utah Association of Counties last spring to resolve the dispute.

"Taxes are always short and road funding needs are always growing, so obviously there was some consternation over who deserves what," Shurtz said, adding that both entities gave a little.

Under the agreement, about $4 million would be shifted to the 11 counties by tweaking the distribution formula again. Cities agreed to not try to get back overpayments made to the counties earlier this year.

Shurtz said those counties would have liked to keep what they got under the previous legislation, but recognizing that everyone benefits from the gas tax increase, say they're satisfied with the compromise.

Cities and counties share 30 percent of the state's gas taxes.

Lawmakers anticipate Gov. Gary Herbert calling them into special session Nov. 16 to consider the new proposal.

Hughes told the House Republican caucus that he wants the fastest special session in history and urged lawmakers not to make any changes to the proposed solution.

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Dennis Romboy

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