After an eight-hour Truth in Taxation Hearing, the Orem City Council voted 4-3 at 1:45 this morning to approve a 25 percent property tax increase for the Orem portion of the property tax bill, instead of the proposed 50 percent increase. That will raise $1.7 million and the city will forego city employee pay raises and other purchases to cover the remainder of the $3.3 million city budget shortfall, $2.8 million of which is due to a UTOPIA bond payment.
But Deputy City Recorder Rachelle Conner said she personally believes Orem residents will file a petition to make the tax increase a referendum item to be voted on by Orem residents in November of 2013. If the petition gets the necessary signatures and is validated, the tax increase will be put on hold until the vote, leading Conner to state that the city will have to make $3.3 million in cuts to city services to balance the city budget.
This is a major victory for Orem residents and the 500 or so who attended last night’s meeting. The vast majority of the roughly 80 people who spoke were against the 50 percent tax increase and the city’s involvement in UTOPIA, the fiber optic network run by a consortium of Utah cities that has net assets of negative $120 million after 10 years of competing with private enterprise.
The hearing was an impressive display of republican government in action: Elected officials listened to public comment for five hours, took three hours for deliberation and made a decision. Many Orem residents don’t agree with that decision, and have an opportunity to stop the 25 percent tax increase.
Most of the residents who spoke articulated sound principles of good government such as not using government to compete with private enterprise; the power of the free market; limiting the services and scope of government; and reasonable tax policy.
During the three hours the city council deliberated after public comment, it became very clear some members of the council have fundamentally different views and principles from those who spoke against UTOPIA and the tax increase. Council members showed support for UTOPIA and expressed their hope that Orem would invest even more in the network to install it across the entire city. Many council members expressed a lack of desire to make any additional cuts to city services as they believe more cuts would hurt the great “product” put out by the city of Orem.
Some council members also said they support the nearly $1 million subsidy paid to the University Mall developer each year, even though there is no legal obligation to do so. Crony capitalism, where select businesses receive subsidies and preferential tax treatment, appears to have strong support from some members of the city council.
In the end, the 4-3 vote might only prove to be symbolic if Orem residents are able to get the proposed 25 percent tax increase on the ballot. But the 4-3 vote is also instructive. Council member Hans Anderson voted against the increase because he did not want any level of tax increase levied against Orem residents. He advocated instead 11 potential cuts that could be made to existing city services and expenditures. The other two council members voting against the tax increase, Karen McCandless and Mary Street, cast nay votes because they wanted a 50 percent tax hike, not 25, and no cuts to existing city services.
Orem voters might eventually get the chance to decide which course to take: a free market, limited government approach or a big government, crony capitalist environment where the city provides more and more services for residents, crowds out the private sector, raises taxes and gives favors to its friends.
Fundamentally different views, indeed.