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Midvale Journal

Midvale budget discussion forges ahead amidst economic uncertainty

Jun 01, 2020 10:44AM ● By Erin Dixon

Administrative Services Director Kyle Mauer presents the proposed Midvale budget via a digital meeting platform. (Erin Dixon/City Journals)

By Erin Dixon | [email protected]

Even facing financial uncertainty in the future, budgets must be made. This year it means making predictions of a shadowy future.  

Every year, cities are required to establish their budget for the coming fiscal year (July 1, 2020 to June 30, 2021) by the end of June.

Since the beginning of the COVID-19 crisis sales tax is down by 8%, fuel tax (income from vehicle fuel sale) is down by 21%, and transient room tax (income from hotels/motels) is down by 37%. 

A tentative budget stated that, “Due to the COVID-19 pandemic, and the expectation of revenues being approximately $1 million less than fiscal year 2020, we recommend the use of approximately $504,000 in fund balance (or rainy day funds) to balance the budget. This use of fund balance will allow the City to continue providing core services to its citizens at the same service level as the prior year.” 

City staff said they worked to decrease city spending by as much as they anticipate losing. Midvale is not laying off employees, no raises are being offered. Minimal capital projects will be performed. 

Midvale anticipates a further loss in sales and fuel tax, as well as another increase request from Unified Police Department. City staff propose to increase property tax to cover these bases.

Kyle Maurer, administrative services director for Midvale City, explained exactly what each resident could see, if the tax increase is approved in August.

“This increase would be tied to the Consumer Price Index (CPI). When the tentative budget was initially being crafted, the CPI index increase was 2.3% ($52,290); it has now dropped to 1.3% ($29,555). This would be a $2 per year increase to the average Midvale resident,” Maurer said. 

However, the percentage tax increase could appear higher, since the city hopes to continue to collect money that has been used for a UPD project, but is nearly complete.

“The city issued a general obligation bond 20 years ago to build the current Public Safety building that UPD uses. With the bond payments ending in the current year, the City would like to use this revenue to help cover the public safety increases,” Maurer said. 

With the debt now paid for the UPD building, city officials would use the money typically collected for that building to be used for other first responder needs. On top of filling in that gap there will be an additional small tax increase, which equates to about $2 increase per resident.

Councilmember Dustin Gettel is concerned that not giving city employees a raise may create more problems than solve.  

“I don’t like the idea of not giving anyone in the city an increase. We have almost three and a half million dollars that we’re sitting on,” Gettel said. 

Using fund balance to pay even cost of living increases for staff would be using a one-time resource for an ongoing cost, if the city doesn’t see an increase in sales or fuel tax in the next year. 

“The only caveat I would give to that, and of course you and the council have the ultimate decision, is that you are building that into the fixed costs of personnel and if the economy doesn’t recover as fast as we’re hoping, we might have to turn around and look at some more drastic cuts,” Maurer said. 

Councilmember Quinn Sperry hesitated to be on the same page. “You hate to say a few months down the road that we have to let people go because we gave everyone raises. I say we keep the approach as it is and re-evaluate in a few months.”

Many businesses and local governments are letting their workforce go, resulting in the highest unemployment rate (over 14%) the United States has seen since The Great Depression, which peaked at nearly 25%.