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S.L. County has lost millions in tax dollars due to bad economy

Published October 22, 2008 12:06 am

This is an archived article that was published on sltrib.com in 2008, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

There's bad news . . . and then there's worse news.

The nation's economic slump already has cost Salt Lake County millions in tax dollars. Now economists are talking recession for the state's most-populous county.

The county's economic outlook remained decidedly dreary Tuesday as officials received word that 2008 tax revenues likely would slip $10.9 million below last year's projections and that a "recessionary economy" almost certainly lies ahead for 2009.

That could mean a particularly pinched budget for county leaders, who still must decide whether to spend an additional $5 million to reopen the mothballed Oxbow Jail in South Salt Lake to relieve overcrowding at the nearby Adult Detention Center.

Still, Democratic Mayor Peter Corroon pledged anew Tuesday that he would not consider a property-tax increase to balance the budget.

Flashing a photo of surfers poised beneath a towering wave, consulting economist Doug Macdonald urged the county to keep its financial footing and "ride this one out." The photo's caption contained a less-comforting message:

"That was a big wave, bro."

"Yeah, bro. Don't fall off now, it still could kill you."

While the county's rainy-day funds remain healthy, its tax revenues have languished - even before the credit collapse and stock slide on Wall Street. Sales-tax earnings during the first seven months of 2008 (the latest available data) had already dropped $4.5 million below the same period in 2007.

Corroon has imposed a hiring freeze and suggested during a campaign appearance this week that he may consider an overall reduction in the number of county workers through attrition.

He has urged departments to present "flat" budgets this fall and promised repeatedly that he won't raise property taxes.

"We are not going to have a tax increase," the mayor insisted. "We are using our scalpel to make some cuts."

The GOP-led County Council is similarly alarmed, urging departments this month to propose additional cuts of 3 percent, 5 percent or even 10 percent.

Next year "will definitely be an even more challenging year," Auditor Jeff Hatch warned in a letter that comes a week before Corroon presents his 2009 budget. "Utah has been somewhat insulated from the national downturn, but we expect that Utah will more closely follow the national recessionary economy next year."

jstettler@sltrib.com

What's next

Salt Lake County Mayor Peter Corroon is expected to unveil his 2009 budget Tuesday at 1 p.m. at the County Government Center's North Building, 2001 S. State.