With annual tax revenues arriving this spring, the numbers showed a surprisingly positive outlook. Utah towns and cities, with the exception of beach resorts and oil towns, have made millions from sales tax revenue. This profit, combined with an infusion of federal funding, allows cities to invest in one-off projects and cover their payroll.
What it does not allow, according to a 2News survey, is tax relief for the Utahns.
The Last One Standing: How an artisanal pizza place survived the pandemic
âMy three neighbors are all restaurants and they’ve gone bankrupt. So there are four of us and I’m the only one still here, âsaid Jared Nieswender.
The owner of Mozz, an artisanal pizzeria in downtown Provo, says he had to lay off all his staff last year. He, his wife and his chef have kept the restaurant open, offering only take-out.
The financial consequences have been devastating.
We have lost between 60 and 80% of our income.
Without a PPP and without a subsidy, Nieswender says his business would be closed like many of its neighbors along University Avenue.
Digital exclusivity: Mozz owner talks about vulnerability of restaurant workers during COVID
âThey gave us heat lamps to put on our patio so that we could still try to make seating outside,â Nieswinder said, adding that he wasn’t expecting anything one way or the other. other of the city.
âOther than that, there wasn’t much about the city that I knew of. At least it directly affected me.
As businesses collapse, local governments invest and grow
The state legislature and state city councils have actually seen better-than-expected numbers during the pandemic, âsaid Cameron Diehl, executive director of the League of Cities and Towns of Utah.
A 2News investigation found that as local businesses shut down and Utahns lost jobs, cities made millions of dollars in profits and gave their employees raises. They also granted bonuses.
Utah’s 249 municipalities tightened budgets last year in anticipation of record losses, Diehl says.
Sales tax revenue typically represents about 30% of a city’s general fund. Unlike property taxes and other stable sources of income, sales tax fluctuates with the economy.
2News Investigates has learned that in major cities in Utah, sales tax revenues did not drop during the pandemic. Instead, revenues exploded because the Utahns were buying products online.
How a mayor cut a city budget
âFirst and foremost I wanted to ask you, if you could take us back to last year, how has the city prepared for the potential economic deficit related to COVID?â Asked 2News investigative reporter Wendy Halloran.
I use the term surgical.
Provo Mayor Michelle Kaufusi said she had neither fired nor fired anyone. Instead, she implemented a hiring freeze.
My managers went to work, I asked them to reduce their budget by 1.5%, except for the firefighters and the police.
According to the mayor, Provo ultimately made money from sales tax revenue during the pandemic.
We were up 8.3% year-to-date, and a year ago this time we were at 5.6 and two years at 3.2. We have seen this trajectory progress.
Most of the CARES law money Provo received went to the police and fire department.
The financial success of Utah cities: a breakdown
2News Investigates found that the city also awarded a 2.5% merit increase to its employees. Provo was not alone. Salt Lake, Ogden and St. George have also given millions of dollars in merit raises to city employees.
In addition, Utah cities have received millions of dollars in CARES Act funding.
Through public record requests, the 2News investigative team discovered that Provo had received $ 8.4 million in funding from the CARES Act. St. George and Ogden received $ 7.6 million and $ 7.4 million, respectively. Salt Lake City received by far the most, with $ 19.2 million.
The Utah Cities and Towns League has confirmed that all municipalities in Utah have received some amount of money from the CARES Act, one of the few states where this has happened.
We didn’t turn down a single company, “Kaufusi adds.” Any company that applied has received money under the CARES Act.
Cities and towns cannot use federal funding from the CARES Act or the American Rescue Plan to directly or indirectly reduce taxes. They can, however, use the money to provide other forms of relief, especially for businesses.
2News Investigates found other cities across the country, such as Albuquerque, Houston and Jacksonville, Fla., Offer pandemic relief, including city-funded stimulus payments to residents. No such payment has been offered in any Utah city.
Kaufusi defends the merit increases, arguing it was a responsible move.
If I needed to dip into my fund for rainy days, it was good to do so.
âYou know, I would also like to see this money invested in the city just for general purposes, for beautification, parks and road repairs, whatever you want,â says Nieswinder.
Provo City told 2News that they plan to use the one-time federal funding from the CARES Act for “generational projects,” such as public parks and a new fire station.