The threat comes 11 days before the Legislature meets in a special session, which city leaders hope will keep their general fund flush but also provide Salt Palace expansion money.

Mayor Rocky Anderson said the city's budget already is so tight that, regardless of the Salt Palace funding, he may suggest closing a fire station and hiking property taxes to hire 15 more police officers.

"This is how tight our budget is. We have no room [for an additional] $2 million hit," Anderson said Thursday.

Because of legislation passed earlier this year, the city stands to annually lose that amount from its general fund for 10 years to help Salt Lake County expand the downtown convention center.

In a meeting this morning with Gov. Jon Huntsman Jr. and legislative leaders, Anderson, City Council members and county leaders hope to convince the state to instead kick in some money or allow the city to impose an additional sales tax that amounts to roughly 1 cent per $10 spent.

The $2 million a year "can't come out of our general fund and it can't be in that amount for the city," said City Council Chairman Dale Lambert. "Our message is, 'We can't and won't do it.' ''

Huntsman has not decided if he will place the city's taxing-district plan on the April 19-20 special session or if he supports the tax, according to his chief of staff.

But Curtis - who is invited to today's meeting - has decided.

"I'm only one vote, but I'll use whatever influence I have to make sure it's dead on arrival," the Sandy Republican said.

He said the taxing district would present an "administrative nightmare" and a disadvantage to businesses in the district, which would run from South Temple to 600 South and from 700 East to 500 West, and also include retail sold at the airport.

Curtis believes the state shouldn't pay for the Salt Palace - even though it receives almost four times the amount the city receives in sales tax generated by conventioneers. Curtis said paying for the Salt Palace would open the state up to having to fund convention centers throughout Utah.

If the state doesn't give Salt Lake City an alternative funding source, the city has two choices: It can divert the $2 million a year in existing hotel taxes to the Salt Palace or it could refuse.

If it refuses, the city would still lose that money, according to state legislation. Hotel taxes would drop, but the Salt Palace probably wouldn't be expanded, and lucrative conventions such as Outdoor Retailers - it generates $32 million a year in economic benefits - would bolt.

"I'm really starting to stress over this whole deal," said Darrin Casper, county fiscal analyst. He said losing the city money could "kill the deal."

The county is paying the bulk of the $82 million project from a hotel tax.

Anderson offered the idea of a property-tax increase or the creation of a fire-protection district Thursday.

The mayor said a property-tax increase would be "unfair." Residents' property-tax burden is already high and that is partly due to his own policies. He successfully pushed for a tax hike in 2003 to pay for various city projects. To raise $2 million, homeowners would pay an extra $13.42 a year on a $150,000 home. Business owners would pay another $162.68 on a $1 million business.

The fire-district idea has fewer details. On certain properties, nonprofits don't pay taxes that help fund the Fire Department.

In the case of the LDS Church, which declined comment, it pays taxes on nonecclesiastical property worth $279 million within the city, making it one of the city's top taxpayers. But under the fire-district proposal, houses of worship for all denominations and now-exempt property owned by other nonprofits would be subject to the special fee.

hmay@sltrib.com

djensen@sltrib.com