CEDAR CITY — A bill that would allow rural counties to impose up to a 0.4% sales tax to pay for jail facilities has successfully passed the Utah House and has been placed on the Senate reading calendar.

L-R: Iron County Clerk Jon Whittaker, Iron County Sheriff Ken Carpenter, Iron County Commissioner Mike Bleak and Rep. Rex Shipp attend House committee hearing, Salt Lake City, Utah, Jan. 19, 2024 | Screenshot image courtesy from Utah Legislature video, St. George News / Cedar City News

The measure, known as “HB 113 Rural County Jail Facilities Tax,” is sponsored by Rep. Rex Shipp (R-Cedar City), with Sen. Evan Vickers (R-Cedar City) acting as its Senate sponsor.

After receiving a favorable 11-0-2 recommendation from the House Revenue and Taxation Committee on Jan. 19, the bill received similarly unanimous support on the House floor Jan. 29, when it passed with a 74-0-1 vote. It then went to the Senate Revenue and Taxation Committee, where it received a favorable recommendation on Feb. 1.

During his introductory remarks at the Feb. 1 committee hearing, Shipp explained that the idea for the bill came about last year as Iron County was seeking options to pay for a new county jail. 

Officials have said Iron County’s existing correctional facility, which was built in 1987 and is the oldest operating county jail in the state, is in dire need of replacement.

As previously reported, the Iron County Commission last year pursued raising property taxes via the truth in taxation process, but later reversed that decision and instead placed a $89 million general obligation bond election on the November ballot, where it failed to pass.

Iron County Jail, Cedar City, Utah, Jan. 25, 2024 | Photo by Jeff Richards, St. George News / Cedar City News

“People are concerned about having a permanent increase on their property taxes,” Shipp said during the Feb. 1 hearing, adding that a sales tax would allow not just property owners but outside visitors to contribute to the cost of building the jail.

“This isn’t going to be only on the property owners,” Shipp said. “Everybody that comes to our county, the citizens of the county, our tourism, they’ll help us pay for the jail.”

According to the bill, the option of implementing the local sales tax increase would only be available to counties that belong to the smallest four classifications (those with populations below 175,000).

Additionally, the funds generated via the tax may only be used to acquire land for a new jail, pay for the design, construction, remodeling or furnishing of a new or existing jail, or pay for debt service on bonds issued to finance costs.

Shipp also noted that the language of the bill is written so as to make the tax non-permanent.

“Once the debt is paid off or the jail is paid for, that tax goes away,” Shipp said.

That aspect was especially important to Iron County Commissioner Mike Bleak, who spoke to lawmakers in person at both the House and Senate committee hearings two weeks apart.

Rep. Rex Shipp (left) and Iron County Commissioner Mike Bleak speak about HB 113 during a Senate committee hearing, Salt Lake City, Utah, Feb. 1, 2024 | Screenshot image courtesy from Utah Legislature video, St. George News / Cedar City News

“We felt that it was very important to have a sunset clause in there for this tax to go away once that its purpose has been fulfilled,” Bleak said.

Another key point, he added, is that the bill requires that a jail sales tax increase be approved by a majority of county voters before it could take effect.

“This basically just gives us, as the County Commission, the authority to propose this to our voters,” Bleak said. “And it must be placed on the ballot in November for a general election.”

Also weighing in on the measure during both committee hearings was Steve Hunter with Utah Association of Counties, who said the association is supportive of the bill.

“Obviously, it’s about local control and having more tools to be able to provide whatever is needed,” Hunter said. “Especially in the rural areas where there’s traditionally not been as many options for some of these types of facilities.”

Hunter also spoke about what he called the broader picture as it relates to the criminal justice system.

Architectural drawing showing what Iron County’s planned jail and sheriff’s complex might look like, Cedar City, Utah, July 2023 | Image courtesy of Iron County, St. George News / Cedar City News

“It’s not necessarily about building a building that’s nicer for prisoners,” he said. “It’s about building a community resource that helps people not only pay their penance, but to teach them how to reintegrate into society.”

“I think, from the counties’ perspective, we want to see creative ideas being presented to solve some of the solutions, because there’s such a gap in our resources in our criminal justice space,” Hunter added.

Rusty Cannon with the Utah Taxpayers Association also spoke at both committee meetings.

“We initially opposed the bill, or had an opposed position on it,” Cannon said at the Feb. 1 hearing. “But after speaking with Rep. Shipp, there were some changes made from the 1% level down to the 40 basis points. It does need to go before the voters. And so we moved to a neutral position because of that.”

At the Jan. 19 hearing, Cannon had noted, “This is really a discussion of property tax versus sales tax, right? Which is a better tool? There’s upsides to both and downsides to both. Sales tax is generally seen as more regressive than a property tax.”

Cannon also noted how incremental, small tax increases may not seem like much individually but they can have a larger impact when considered together.

 “If you look at the sales tax charts, now, wherever you pay sales tax, there’s like eight layers,” he said, adding that if a ninth or 10th layer is added, “it just starts to add up … it’s a death by 1,000 cuts.”

Lt. Shalon Shaver, commander of Iron County Jail, speaks during Iron County Commission meeting, Parowan, Utah, Aug. 28, 2023 | File photo by Jeff Richards, St. George News / Cedar City News

Nevertheless, he said, “We do appreciate the amendment down to 40 basis points (0.4%).”

During his comments, Bleak agreed that having the maximum be at 0.4% is much more feasible.

“We felt that that number was appropriate,” he said. “That will cover our bond payment and really not much more. We’re not looking to make money or to line the coffers.”

Added Bleak: “We don’t want to put ourselves in a position to raise that tax, say, higher than Washington County, our nearest competitor, for people to go buy vehicles. When we come to a number, we’re going to look very closely at those numbers … it is important to keep our local businesses competitive.”

For Iron County’s purposes, a 0.4% sales tax increase is thought to be sufficient to pay for its projected new jail, according to officials.

Iron County Auditor Lucas Little told Cedar City News that current estimates indicate that the collection would bring in an extra $5 million to $6 million annually, “which is right around what the payment would be based on our last bond estimate.”

Added Little: “The yearly payment could change based on interest rate and bond terms.”

Following the comments and questions at the Feb. 1 committee hearing, Sen. Luz Escamilla (D-Salt Lake) made the motion to give the bill a favorable recommendation, after which the committee voted 4-3-1 in favor.

“The last couple of years, Sen. (Evan) Vickers and myself have been involved in the conversation with regards to our mental behavioral health and the impact to our jails, and actually, the lack of resources, especially in the rural areas,” Escamilla said as she made her motion to recommend the bill, adding, “I think the good sponsor has been creative in trying to find ways to get this funding.”

HB 113 was circled on the Senate’s reading calendar on Thursday, Feb. 8. It has not yet been brought up for a vote by the full Senate.

Check out all of St. George News’ coverage of the 2024 Utah Legislature by clicking here.

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