Residents weigh in on Millcreek’s energy tax to fund UPDOct 01, 2022 07:50PM ● By Sara Milano
Millcreek residents wait for their turn to give a public comment about the city’s new tax. (Sara Milano/City Journals)
By Sara Milano | [email protected]
Local and nationwide labor shortages in law enforcement have resulted in a $2.5 million increase in Millcreek’s contract with the Unified Police Department. As a result of this increase, the city has chosen to implement a 6% municipal energy sales and use tax to help supplement the cost. This decision comes on the heels of a 4.57% increase in property taxes that was implemented in August, also for the purpose of funding the police department.
The city held a public hearing about the energy sales and use tax Sept. 12, where dozens of Millcreek residents gathered to voice their opposition or support for the tax increase. One woman held a cardboard sign that said: “No new windfall taxes,” and many others gave public comments lamenting the tax. Following the public hearing, the tax will be voted on and likely approved at the Sept. 26 meeting of the council (after press deadline). Because the city’s fiscal year runs from July to June, the tax will only generate six months of revenue for the city beginning next year.
This particular tax has never been collected in Millcreek, but has been levied in several surrounding towns such as Sandy, Holladay, Cottonwood Heights and Salt Lake City. The council’s frequently asked questions document about the new tax explains that “all cities are facing this problem of rising costs, especially in law enforcement. Nine other cities in Salt Lake County, and various other entities, adopted tax increases this year.”
The sales energy and use tax applies more unilaterally to Millcreek community members than a property tax, which does not affect churches, schools, financial institutions, and nonprofit organizations. Millcreek’s Finance Director Lori Johnson hopes that the tax will generate “an overage of about $400,000” that will “carry forward to the next fiscal year.” However, even after increasing property taxes, implementing the sales and energy use tax, and pulling from the general fund balance, Mayor Jeff Silvestrini suggested further tax increases will be necessary to keep pace with UPD’s contract.
The state of Utah caps the sales and energy use tax at a 6% maximum, so “what we would have to look to if we needed more revenue is the property tax,” Silvestrini said. He explained that “unless we cut the budget by that amount, by 3%, we will probably need 3% more revenue to continue paying this contract.” He sympathized with residents, saying, “We hate this too, but it’s our job to make hard decisions sometimes and funding our police department is maybe one of the most important services that our city provides to our community.”
Millcreek currently employs 61 full-time police employees at UPD. Despite general decreases in crime over recent years, the city is ardent that residents want more police presence and enforcement of traffic violations, drug crimes and property crimes. The frequently asked question sheet warned residents that “historically robbery and property crimes rise during recessions. Now is not the time to decrease police services.”
While council members asserted the importance of funding police in the face of financial uncertainty, some residents viewed the state of the economy as a reason not to levy additional taxes. Millcreek resident Thomas Wall said, “The trend in energy costs for the consumer is on the up and up.” He told the public that he expects energy costs to double in coming years. Wall explained that for him and other retirees, “we can’t afford it…I’m on social security and I can’t take another kick in the pants…we are already taxed way too much.”
Deputy Chief of the Millcreek Precinct of the Unified Police Department Steve DeBry attempted to assuage the public, offering his personal phone number and an opportunity to ride along with UPD for any resident who is curious about what the police do. The labor shortages and subsequent salary increases for law enforcement that caused the tax increases are unlikely to subside in coming years. With the energy sales and use tax capped at 6%, Millcreek’s city council will have to find another way to generate revenue for the police contract, likely by raising property taxes.
The energy sales and use tax will take effect January 2023.