Tuesday, June 7, 2011

Population shifts threaten city sales tax revenues

Shifting populations across Utah are forcing city governments to cut employees and services as residents, and a greater share of sales tax revenues, leave mature communities and head to new developments. As communities mature and become more expensive, areas with new property developments are attracting growth, and along with that, a bigger share of the state's sales tax revenue.

Population growth plays a key roll in how cities fund their operations. Utah uses population measurements to redistribute some sales tax revenue, so newer communities have funds to support their growth. For every $100 spent, communities keep 50 cents of sales tax, while another 50 cents fund a statewide pool that is doled out based on relative population size. Deseret News