In fact, the measure could force Murray, Riverdale, South Salt Lake, Park City and Vernal to make a painful choice: raise taxes or cut services.
"What would it take to keep our head above water?" asks South Salt Lake Councilman Bill Anderson. "We'd have to raise property taxes by 150 percent over the next sev-en to 10 years."
For his blue-collar city of 22,000 - whose per capita income ranks among the lowest in Salt Lake County - that kind of tax increase would sting.
The other option would be to trim services, but that's an equally unattractive solution for a city facing $1.8 million to $2.8 million in lost revenue.
"In the last three to four years, we've cut 20 positions and reduced our capital equipment [expenditures] to 17 percent" of the total budget, Anderson says.
Amended the last night of the legislative session, SB35 would change the way Utah's 242 cities and towns collect sales tax revenues by eliminating a 1983 "hold harmless" provision used consistently by a dozen cities to maximize sales tax revenues. (At least 20 other cities used the provision periodically to do the same.)
Before 1983, cities received 0.75 percent of sales tax revenues based solely on point of sale.
The 1983 provision bumped municipal sales tax revenues to 1 percent and shifted to a 50-50 formula in which cities pocket half the revenue from sales within their boundaries and the other half is divvied up based on population.
Since 1983, the "hold harmless" exception allowed cities to bounce back and forth every month, using the option that netted the most sales tax revenue.
If signed into law, SB35 removes that choice, putting all cities on the 50-50 plan starting in July.
A common thread among the five most-affected communities is a daytime - or tourist - influx that surges the cities' population.
Riverdale, for example, has 8,000 residents. But during the day, the Ogden suburb's population - with its thriving commercial core - mushrooms to 40,000 to 60,000.
"We're required to provide public safety for the highest number," says Riverdale Mayor Bruce Burrows.
"We really don't want to raise property taxes. We'll just have to make adjustments over time and hope that growth and other taxes offset that economic downturn."
Murray Mayor Dan Snarr says the change - which would freeze revenue caps at 2004-05 levels - comes at an unfortunate time for his commercial-rich city.
"This year, we had the largest quantum jump in sales tax revenue," Snarr says.
The Murray mayor says he suggested lawmakers figure population for cities such as Riverdale, Murray and South Salt Lake by splitting the difference between the resident population and the expanded daytime numbers.
Utah cities have launched budget talks for the coming 2006-07 fiscal year.
Many face having to pay rising insurance costs for their employees.
"I told everyone to come in with a very austere budget until we find out what we can accomplish with the money we have," says Snarr, voicing a commitment to addressing Murray's roads and infrastructure needs, even if it means a tax increase.
Park City, one of Utah's premier tourist towns, will be similarly affected by SB35.
"A property tax increase won't fly here. Eventually, we'll have to scale back services related to tourism," says Park City budget analyst Bret Howser. "We supported the bill because it phases it out over time rather than all at once. This way we can reduce some of the sting."
cmckitrick@sltrib.com
Cities face money crisis
l What SB35 would do: Starting in July, municipal sales tax revenues for so-called "hold harmless" cities would be frozen at 2004-05 levels. Those cities would have seven to 10 years to outgrow that cap.
l How much three Utah cities stand to lose:
l Murray: $1.2 million to $1.5 million
l Riverdale: $1 million
l South Salt Lake: $1.8 million to $2.8 million
