On Nov. 2, 2021, a special election will be held to vote on whether to increase sales tax by one percent (1%), raising the sales tax rate from 5% to 6%.
Unlike previous sixth-penny sales tax proposals, which were for specific purposes such as building a medical office building, building new streets or fixing the wastewater treatment plant, this tax proposal would allow the funds to be used for general purposes of funding local government.
The justification given by the county commissioners for the tax is for public safety and economic development. The county resolution states that “recent revenue reductions and escalating costs have placed funding for public safety agencies as an immediate concern for Sweetwater County.” Those “public safety agencies” include “ambulance service providers, the Sweetwater County Joint Combined Communications Center and other tax supported local government safety organizations.”
Sales tax receipts in 2020 were low, coming in about 15% below the prior year. That shortfall was, however, offset by federal American Rescue Plan Act (ARPA) funding, which provided $8.2 million to the Sweetwater County Commission, $3.4 million to Rock Springs and $1.79 million to Green River. In the meantime, sales tax receipts in 2021 have rebounded, with Rock Springs running 56% ahead of its budgeted forecast.
The county pays $1.3 million per year to subsidize the existing ambulance service providers. Depending upon the year, an additional one-cent sales tax would raise $17 million to $22 million annually countywide. A $1.3 million problem is not sufficient to justify a $20 million tax increase.
Of the existing five cents per dollar of tax, the cities and county receive 2.24 cents and the state gets 2.76 cents. If this tax increase passes, then the cities will receive 3.24 cents on every dollar, which is a percentage increase of 44%. As sales tax accounts for about 60% of total city revenue, the city’s revenue would increase by about 27%.
For Rock Springs, that would take the annual general fund spending from about $32 million per year to about $40 million per year. Does the city, which currently pays zero dollars ($0.00) for ambulance service, need an extra $8 million per year?
As for economic development, it could be reasonable to devote one-fourth penny of sales tax to economic development, as Goshen County does. The current ballot proposition authorizes one-fourth of a penny for economic development, but does not require that it be used for that purpose. An economic development tax proposal should be a separate ballot proposition, accompanied by an explanation of how the money is going to be spent.
If the voters approve the tax increase, the county commissioners can extend it beyond four years by resolution without a further ballot proposition. Because it is a general-purpose tax, much of it will be used for government employee payroll, thus making it difficult to repeal.
There may come a day when such an additional general-purpose tax is necessary, but for now, there is no need to break the glass.
Vote no on November 2.