Moab’s representative in the Utah House of Representatives proposed a bill in February to reform provisions of the Transient Room Tax, a major funding source for Grand County’s and Moab’s public services, and it is nearing passage by Utah lawmakers with strong support from many officials in Salt Lake City and few in Moab.
According to Grand County officials, the bill, if passed, would not do enough to support the spending the county must do to mitigate tourism impacts and makes public support of Grand’s tourism economy a “bad business plan,” creating more strain on public infrastructure than the tax can sustainably cover, leaving local residents to pick up the tab via property taxes.
Although local officials closely criticize the bill in its current form, it has gained significant support from state lawmakers, enough to survive a veto by the governor, if that were to happen. The Utah House of Representatives recently passed the bill with 71 votes in favor and four abstentions. The Utah Senate’s latest — but not yet final — vote on the bill showed 26 out of 29 state senators were backing it. The remaining three abstained on the March 10 vote.
H.B. 280 Transient Room Tax Provisions is sponsored by Grand County and southeastern Utah Rep. Carl Albrecht, R-Richfield, who Grand County Council members said is “firm” on the existing language in the bill after discussions regarding the bill with tourism industry lobbyists, the state’s fiscal analyst and other parties on the impacts the bill would have.
Albrecht told The Times-Independent that Grand County would, if the bill passes, be getting “more than they had before” the bill was introduced with respect to how the county would like to be allowed to spend its share of TRT revenue. When asked why the bill had changed from its original form, Albrecht said that “the pie is only so big” and that competing interests in the bill had forced the compromise.
“Can we tweak it in future years?” Albrecht asked rhetorically. “Maybe.”
Among the changes the bill would have are that counties such as Grand would be freed up slightly on how it can spend its share of TRT revenue, explicitly allowing the county to spend lodging tax revenue on public airports, public transit and public parking. The bill would also allow cities — and Moab in particular — to continue making bond payments on debts made to cover tourism-related spending.
Grand has already spent TRT funds on the Canyonlands Field Airport in recent years, to objections from state auditors who challenged the legality of the spending. The bill would clarify that small counties such as Grand are allowed to spend on publicly owned airports.
Although the bill frees up the county to spend on more improvements than have been explicitly allowed in the past, county officials pointed to the changes that have been removed from the bill as the most striking.
According to Grand County Clerk-Auditor Chris Baird, the bill does not do enough to help the county address growing costs that it already faces because of tourism. The county recently passed the largest property tax increase the area has ever seen, and it is the first time the property tax has increased since 2008. Baird said that happened because the county needed to cover the costs of tourism impacts.
“I think a lot of that comes down to the fact that our promotion and the growth that we are experiencing in this community is creating expenses that are exceeding the revenue that is coming back in,” Baird said. “The way that I analogize the current TRT legislation is: It’s a bad business plan.”
As it stands, 47% of the county’s share of local TRT revenue must be spent on promotion. The other 53% may be spent on mitigating the impacts of the tourism that the advertising attracts. The bill Albrecht proposed in February would have changed that split to allow 68% of TRT revenue to go toward tourism mitigation.
After changes to the bill, that flexibility is no longer on the table.
If the state senate passes the bill in its current form, the 53-47 split that currently governs counties’ TRT spending would remain. In its place, any growth in TRT revenue — that is, any additional lodging tax revenue a county collects above what it collected the previous year — would be split 37-63, with the larger share going toward mitigation.
That change will have little to no impact on Grand’s budget woes, according to Baird, leaving the county “in the red.”
“In order for the TRT legislation to have any really significant effect on our budget, it will take literally decades to happen because it’s going to be very, very slow, and so it’s not really a substantive change to the TRT legislation,” Baird said. “It’s not going to be a great help to Grand County.”
The bill was scheduled on March 10 to go back before the Utah Senate for a third and final vote before then going to Gov. Gary Herbert to be signed into law or vetoed.