BY JENNIFFER WARDELL
Clipper Staff Writer
CENTERVILLE — A tax hike for gas and power will help keep Centerville’s roads in good shape.
The city council voted on Tuesday to raise the city’s Energy Sales and Use Tax by 1 percent, bringing it in line with the percentage charged by most of Davis County. The move is expected to raise $140,000 for next year’s budget, which will go toward road maintenance and improvements.
“The Class C Road Fund revenue from the state has really stayed flat, and the cost of asphalt has gone up,” said Centerville City Finance Director Blaine Lutz. “We’re finding it harder and harder to find the money to put into roads, and the money we do have is buying less.”
Utah law states that 6 percent is the maximum energy tax that can be charged by cities, and the increase will bring Centerville’s rate up to that level. Fruit Heights is the only Davis County city that doesn’t charge the 6 percent rate.
“From the property tax comparisons, Fruit Heights’ tax rate is significantly higher than Centerville’s,” said Lutz.
Utah cities receive a portion of the state’s Class C Road Fund Revenue, funded by the state’s gas tax, in order to help maintain roads.
The amount Centerville receives has dropped slightly in the last several years, going from $476,340 in 2003 to $464,392 in 2012. During that time, inflation has increased the price of materials.
For the last few years, Centerville officials have spent about $500,000 a year on road maintenance and improvement. According to Lutz, an ideal figure would be closer to $750,000.
“We have a fairly high standard of what we’ve been replacing,” he said. “Some cities are happy when they hit $500,000, but for us that’s fairly low. We could lower our standards, but in a few years that could catch up to you.”
Road costs are paid from the city’s general fund, which is replenished by energy, property and sales taxes. Centerville hasn’t increased its property tax rates in 20 years, and the city’s sales tax revenue is only now beginning to recover the numbers reached before the recession hit. Centerville’s UTOPIA debt payments have put a further strain on the fund.
One reason why the city chose to increase the energy tax is that it takes advantage of Centerville’s growing commercial district. Energy taxes are determined by use, which means that larger stores will help shoulder a fairly large part of the burden.
“Somebody like Walmart pays a lot of money for power,” said Lutz.
The process required to change tax rates takes about three months. Officials expect the new rate to kick in by the start of the new budget year this summer.