SALT LAKE CITY — The head of the Utah State Tax Commission fired a warning shot at policy makers over deals designed to lure professional sports teams and launch massive development projects in the state.
In remarks at the Utah Taxpayers Association's conference on Friday, tax commission chair John Valentine said lawmakers risk eroding Utah's overall tax base with so many deals they've handed out.
"Some of the projects that we’ve passed in the state are eroding the tax base by sales tax diversions and tax increment financing," Valentine repeated in an interview with FOX 13 News after his speech.
Outlining a long list of deals including the inland port, Point of the Mountain development project and recent ones to lure National Hockey League and Major League Baseball to Utah, Valentine said he is concerned that down the road? Local and state government will ultimately be forced to raise taxes on residents because they diluted the tax base.
"As a taxpayer? I would be concerned that the government can’t do the function that they’re required to do without raising the taxes because they’re diverting the taxes for other things," he told FOX 13 News.
The remarks generated some buzz in the room, as they stood as a warning to lawmakers who have rushed to pass bills to spawn these development projects. Senate President J. Stuart Adams, R-Layton, defended the legislature's maneuvers. He argued they have lured employers to the state and boosted economic activity.
"Some of these things, we'll weigh them against the outcomes. We will do that, we’ll make decisions like we always do in the legislature," he said.
Asked if the legislature has perhaps bit off more than they could chew, the Senate President told FOX 13 News: "Time will tell. But look, we’re already getting a hockey team coming. We probably wouldn’t have had the hockey team if we hadn’t backed it. We’re working to get a baseball team, we’re very competitive. We’ll see if that happens. Maybe, maybe not. The inland port’s a great thing."
The Utah Taxpayers Association said it shared Valentine's concerns. The individual deals themselves aren't the problem, said the tax watchdog group's president, Rusty Cannon. It is all of them added up across the state for decades.
"It’s just death by a thousand cuts. It’s been coming and it’s starting to hollow out our tax base," he said.
At the same conference, the Larry H. Miller Company updated the crowd on its massive development plans surrounding an MLB stadium. Their deal with the legislature called for the creation of a district that dips into sales tax generated from the project itself (it was rewritten after pushback over a statewide hotel tax increase). The land for all of this has been acquired, across from the Utah State Fairpark.
"I think it’s really important for taxpayers and others to understand that it’s post-performance," said Amanda Covington, the chief corporate affairs officer for The Larry H. Miller Company. "So there will be this infusion of private capital investment and taking on risk to then ensure that we create something that’s very sustainable and then generates that tax revenue."
The Larry H. Miller Company is planning to invest $3.5 billion of its own money in the development project. Through the bill passed by the legislature, the state would own the stadium and if a team were to leave within 30 years — the company would have to pay the state back for its investment.
Both the NHL and MLB projects have had significant support from Salt Lake City leaders.
Covington also offered some updates on efforts to lure a professional baseball team to Salt Lake City. That expansion team process will likely begin in earnest once MLB is done with upcoming collective bargaining agreements. But she said it's also possible they could inherit another city's team (similar to how Utah Jazz owners Ryan and Ashley Smith wound up with the former Arizona Coyotes hockey team), referencing past issues with the Oakland A's and Tampa Bay Rays.
The Larry H. Miller Company said it would take either option.
"What we want to show MLB is that Utah is ready now and Utah is ready when they’re ready," Covington told FOX 13 News on Friday.
When we get a team? It will have "Utah" in the name, not Salt Lake City. The company has also expressed a desire to have the Salt Lake Bees (which it also owns) be the "farm team" for the pro team. Currently the Bees are an affiliate team for the Los Angeles Angels.
