UTA passes budget that increases spending by 13.3 percent

(Trent Nelson | The Salt Lake Tribune) One of UTA's Utah Valley Express (UVX) buses makes a stop in Orem, Tuesday Sept. 25, 2018.

The new Utah Transit Authority board passed a 2019 operations budget Wednesday that includes a big 13.3 percent spending increase — thanks in part to a sales tax hike just imposed by Salt Lake County, and direct contributions from that county and Salt Lake City to increase service in their areas.

The budget goes from $403.1 million to $456.8 million. Fares will remain unchanged.

More than a quarter of all money will go to pay interest on the agency’s $2 billion debt — incurred in recent decades essentially as a mortgage to accelerate building its TRAX and FrontRunner rail systems.

Debt service is UTA’s single-largest expenditure, costing $119.6 million next year. The next biggest expense, at $102.1 million, is for bus operations.

Controversy over UTA’s debt — plus scandals over high executive wages, extensive international travel and sweetheart deals with developers — led the Legislature this year to restructure the agency.

It replaced the old part-time, 16-member board with a new full-time, three-member commission designed to better oversee the agency. Only two members of that new board — Carlton Christensen and Beth Holbrook — have been appointed by Gov. Gary Herbert. They took over agency operations last month.

Most of UTA’s projected revenue for operations — 68.3 percent — will come from sales tax. Passenger revenue is projected to provide only 11.7 percent of revenue next year. Federal grants would provide 14.5 percent.

Also, the budget includes $1.5 million that Salt Lake City is expected to commit for extra bus service in the capital. It contains $500,000 from Salt Lake City for extra service on the S-Line streetcar in Sugar House.

Officials say a new sales tax imposed earlier this year by Salt Lake County will provide an extra $13.4 million for a half year because of the way the tax hike is structured.

The new tax adds 2.5 cents to a $10 purchase (or 0.25 cents per $1), with some money going to UTA and some for local roads.

Voters in Salt Lake and Utah counties had killed a similar proposal in 2015. However, the new legislation that restructured UTA allowed counties to impose that tax now without voter approval. Salt Lake County opted to do so after city councils representing a majority of the county’s population passed resolutions supporting it.

The new budget includes a 3.5 percent pay hike for UTA workers represented by labor unions. It includes a 3 percent raise for administrators.

It calls for a 7.2 percent increase in funding for bus operations, in part because it projects a 13 percent increase in the cost of fuel. It projects a 6.2 percent increase for commuter rail operations, and a 1.9 percent increase for light rail.

The budget increases come as UTA is reporting decreases in its ridership this year — continuing a trend over recent years, in part because low gasoline prices led more people to use cars.

Through October, UTA ridership this year dropped by 2.1 percent. However, it was up slightly in October in part because of the popularity of the new Utah Valley Express bus rapid transit route — which currently offers free fares because of a federal grant.

The UTA board also passed on Wednesday a separate $141.4 million capital project for new buildings and projects. Among them are:

• Spending $2.7 million to start relocating the TRAX station at Salt Lake City International Airport, made necessary by construction of a new terminal.

• Continuing construction to double-track the Sugar House S-Line streetcar.

• Using a $1.2 million earmark from the state to complete environmental and preliminary design work for a bus rapid transit line in south Davis County.

• Finishing final design on a bus rapid transit line from downtown Ogden to Weber State University, with construction expected in 2020 or 2021.