Provo Mayor John Curtis proposed that the Legislature’s Revenue and Taxation Interim Committee enact a law allowing a city like Provo to dedicate a portion of their general property tax revenues to be spent only on roads during interim meetings today. The proposal is meant to help address cities’ desire to adequately fund their transportation needs.
Mayor Curtis was motivated to come to the Legislature because, traditionally, the city has paid for road maintenance through issuing $1.2 million in debt every ten years via a bond. The downside of that approach has been that, as a debt instrument, the bond requires the city to use some of the increased property tax revenues that the bond creates to pay interest on the bond – money which they would prefer to use on road maintenance. Additionally, the city is concerned that if they chose to permanently raise property taxes through a Truth-in-Taxation hearing – rather than “temporarily” raising property taxes every ten years by sending a road maintenance bond to a vote of the people for approval – a future city council would defeat the purpose of the property tax increase by choosing to spend those funds elsewhere.
The mayor’s proposed solution was to ask the Legislature to consider allowing cities like Provo to permanently raise property taxes via a Truth-in-Taxation hearing, but be able to require that those new property tax revenues be spent on road construction and maintenance. If a future city council wanted to spend those earmarked property tax revenues on something other than roads, the city would then have to go through a Truth-in-Taxation hearing to do so. If the Legislature allowed Provo to dedicate property tax revenues in this way, they would no long issue bonds for road maintenance.
The response to the idea from legislators was mostly positive, but with a desire to know more. The committee chose to put the idea on the next interim committee agenda for further consideration.