Orem taxpayers should vote NO on a $1.6 million annual sales tax increase inteneded to fund the arts. Taxpayers in Orem and throughout the state have more pressing needs than funding arts and entertainment. The tax base is finite, and tax dollars that are spent on arts and entertainment cannot be spent on critical needs, such as transportation, education and public safety. Orem taxpayers should insist on tax cuts, not tax hikes. Utahns bear the nation's third highest state/local tax and fee burden. Even small tax increases, including those that are not very visible or noticeable, contribute to this high tax burden. Experience clearly demonstrates that providing adequate funding for critical needs while reducing tax burdens promotes economic growth. The Orem arts tax proposal earmarks general tax revenue for specific purposes, and tax policy experts agree that this is poor tax policy. Government spending needs to be annually prioritized in order to maintain budgetary discipline. Dedicating or earmarking general tax revenues for specific purposes places government spending on auto-pilot and reduces government's ability to balance budgets without raising taxes or cutting essential services such as public safety. Fiscal responsibility requires prioritizing existing spending, not raising taxes every time someone comes up with a so-called "good" idea. Tax proponents claim that the Orem arts tax would increase economic development because people will spend money at the subsidized arts venues. However, taxpayers will have $1.6 million less to spend annually due to the tax increase. Moreover, because the overwhelming majority of patrons of these subsidized venues would be Utah residents, consumer expenditures at the subsidized arts venues would simply be discretionary expenditures that are already occurring elsewhere in the state. The tax increase would simply shift existing and future household expenditures from non-subsidized venues to the subsidized venues and will not create new household expenditures that otherwise would not exist. Besides, due to negative savings rates, consumer capacity to spend more is limited. Raising taxes to subsidize arts venues in Orem in order to attract consumer expenditures from other Utah cities makes no sense. What would be next? Raising taxes in Provo to subsidize entertainment venues in order to attract consumer expenditures from Springville? To promote economic development, Utah should focus on increasing high-wage jobs in industries like biotech, pharmaceuticals, information technology, manufacturing and in industries that export goods and services. With the creation of high-wage jobs, consumer expenditures will naturally increase, allowing for increased household expenditures at local retailers and entertainment venues. Tax supporters claim that sales taxes promote economic development by taxing tourists, although out-of-state tourists pay only 7 percent of sales taxes in Utah. Sales taxes are paid primarily by local consumers, and sales taxes harm low-income households more than anyone else because low-income households spend a higher percent of income on taxable purchases. Finally, tax proponents claim that arts taxes "pay for themselves" by reducing crime. If these dubious claims are true, then existing government expenditures should be used to fund the arts because the need for government expenditures will decrease due to the alleged benefits of subsidized arts venues. The Orem arts tax is fiscally irresponsible and will not promote economic growth. In 2002, Utah County voters rejected a similar measure by a wide margin, as did Davis County voters in 2004. Orem voters should do the same.

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Mike Jerman is president of the Utah Taxpayers Association.