Lawmakers said they would listen to Moab about tax reform. They did.

Reform for Transient Room Tax may be gaining traction

Attendees of the Tax Restructuring and Equalization Task Force’s public comment period in Moab look on as a local woman addresses the task force on Saturday, July 20. Photo by Carter Pape

State lawmakers, local officials and Moab residents convened at the Grand Center to talk about tax reform on Saturday, July 20, and many locals came away feeling heard.

The weekend sky was blue and a comfortable breeze cooled the desert air, but a room full of locals showed up to the four-hour event anyway, many to address lawmakers directly about their thoughts on proposed tax policies that some feared could devastate the local economy.

The session was the seventh of eight for the Tax Restructuring and Equalization Task Force. Members have spent the last four weeks traveling the state, holding similar listening sessions in St. George, Layton, Richfield and other cities. Orem will be its last stop on Tuesday, July 30.

Among the top issues discussed were the Transient Room Tax and its importance in Moab for offsetting the costs of tourism and education spending in Utah, which is among the lowest in the country.

Feeling heard

Active listening is a technique used in conflict resolution, requiring the listener to fully concentrate and attempt to understand the speaker, in particular, by mirroring back what was said. Although the term was never used during the public hearing, many of the legislators and locals who came to the event did just that.

“I think it’s clear, when they talk about what they’re taking away, that they appreciate the complexity of what we’re doing here,” said Rani Derasary, a Moab City Council member, after the event.

As Derasary mentioned, the event ended with task force members reflecting to the audience on what they had learned during their visit to Moab. The event itself included three hours of public comments and a question-and-answer session with lawmakers.

Grand County School District teacher Mike Estenson addresses members of the Tax Restructuring and Equalization Task Force as Park City Mayor Andy Beerman waits for his turn. Photo by Carter Pape

Park City Mayor Andy Beerman said after the event that he also felt that the task force members did well in listening to and internalizing public comments and sentiments.

State officials remarked that, among the locals that they met during their trip, Moabites exhibited particularly well-informed positions about the taxation issues facing the state, county and city.

“One of the things that I’ve observed during this meeting that is really interesting to me and kind of heartwarming is the sense that this community really understands what is going on with the tax base and how important things like the transient room tax and the hotel tax are,” said Gary Cornia, a former Utah State Tax commissioner and non-voting member of the task force.

Education spending

A large assemblage of locals who attended the event wore red, a color known for its association with the national labor movement for educators dubbed Red for Ed. Grand County School District employees showed up to address the issue of education spending in Utah, which by some measures is the worst in the nation.

According to U.S. Census Bureau calculations, Utah has ranked in last place among all 50 states in per-pupil spending each of the past 10 years, and possibly longer. Per-pupil spending is the average amount of money spent by a state on a student’s education.

Moderator and former Democratic State Senator Patricia Jones asked at the beginning of the public comment period that audience members raise their hands after somebody spoke if they agreed, rather than clapping.

As speaker after speaker discussed the importance of improving the level of funding for schools and of modifying the room tax to give municipalities more leeway to spend the revenue on mitigating tourism impacts, many audience members consistently raised their hands.

“We have a lot of agreement here in Moab,” Jones said after the audience largely expressed its concurrence with local teacher Mike Estenson’s remarks on turning Utah into a top-ranking state for education spending.

“I first am asking for a challenge, that as a family-based state, that we are ensuring that we are funding the most important part of our families, our children, not just well, but pull up our WPU [weighted pupil unit–a measure similar to per-pupil spending] from the abysmal bottom to the top third of the country,” Estenson said.

Transient Room Tax reform

Grand County Council Member Curtis Wells addresses members of the Tax Restructuring and Equalization Task Force at a public hearing on Saturday, July 20, regarding the Transient Room Tax and its impact on Moab. Photo by Carter Pape

While event attendees touched on numerous topics in their comments, including taxation on online sales from merchants like Amazon and the taxation of healthcare services, one of the key topics of discussion besides education spending was the Transient Room Tax.

TRT is a tax collected by Moab and Grand County at the point of sale in local hotels, motels and other lodging establishments, including small-scale operations run through Airbnb and VRBO. Utah laws allow municipalities that collect the tax to spend it on mitigating the impacts of tourism.

However, for Grand County and other counties, 47% of the TRT money must be spent on advertising local tourism, hence the large amount of funding directed toward the Moab Area Travel Council, which accounts for roughly one-sixth of the county’s general fund.

Grand County Council Member Curtis Wells spoke on behalf of the council at the event. During his two minutes, he spoke about the room tax and asked for more leniency in how the money can be spent.

“The solution here is to relax the requirement of the 47% promotion and give the counties, like the State of Utah that is seeking less silos for revenue, the flexibility to manage the experience, to manage the infrastructure, so we can continue to host a world-class economy in the county,” Wells said. The room then erupted with applause.

Speakers, including Wells and Moab City Council Member Kalen Jones, pointed out the large disparity between Moab’s permanent population and its transient population. Speakers said between 3 to 3.5 million visitors came to Moab last year; this compares to the roughly 10,000 residents who live in Grand County.

During the question-and-answer session that followed public comment, many of the task force members expressed an interest in reforming room tax in order to allow counties more leeway in how the funds are spent.

Lawmakers have previously expressed an interest in reforming TRT, as well. State Sen. Carl Albrecht recently said in a letter to the Grand County Council that he was looking to sponsor such a bill.

“I am interested in and have been planning to sponsor a bill that will directly reform the Transient Room Tax law,” Albrecht wrote. ”Grand County is indeed the poster child for the need to bring this antiquated law up to date with the modern demands of our rural counties.”

Fears diminished, but not averted

Co-chair of the Tax Restructuring and Equalization Task Force Lyle Hillyard, R-Logan, addresses the audience at a public hearing at the Grand Center on Saturday, July 20. Photo by Carter Pape

Park City Mayor Beerman attended the meeting in lieu of Moab Mayor Emily Niehaus, who was unable to go. He said he felt good about how the meeting went, but warned that the final decisions on tax reform could still go either way for Moab.

Beerman was among the leaders of Utah resort communities who feared earlier this year, when tax reform was gaining traction during the two-month state legislative session, that proposed changes could have severe consequences for such cities and counties.

“This could go so many different directions,” Beerman said after the meeting. “I remain optimistic, as long as they continue these sorts of conversations – it could end up in a positive place – but I will also remain very vigilant because this could have dire effects on our communities.”