Initiative 1 Backers Respond to Criticisms

The following was written by Utahns For Clean Water, Clean Air and Quality Growth.

Initiative 1 will not impact Utah’s AAA bond rating.
Initiative 1 will authorize the issuance of sales tax revenue bonds – not general obligation bonds. Because these bonds will be paid off using income from a specific revenue source – sales tax – Initiative 1 will not affect Utah’s bond rating.

In remarks made before the State of Utah Tax Review Commission on September 9, 2004, State Treasurer Ed Alter said, “The issuance of these bonds, on their own, will not adversely affect Utah’s AAA bond rating.”

At current valuations, Utah’s constitutional debt limit is approximately $2.7 billion. Total state indebtedness is approximately $1.7 billion. Additional debt of $150 million will scarcely put a dent in the +/- $1 billion available before we reach our constitutional cap.

Initiative 1 does not earmark “$30 million for convention centers.”
There is no provision in Initiative 1 which earmarks $30 million for convention centers.

Because quality growth needs are different in different communities, cities and counties may apply for $25 million in Community Project funding. In this category, eligible projects may either be conservation oriented (e.g., the protection of watersheds, farmland, open space etc.) or “additional quality of life and infrastructure projects”, including the construction of certain recreation and municipal facilities. There is nothing in the measure that says any specific portion of the $25 million has to be spent on facilities or infrastructure.

The Community Project concept was included to honor the quality growth needs of rural parts of the state. Because rural Utahns will be contributing sales tax to pay off Initiative 1 bonds, and have other quality growth needs besides open space, it is only fair that rural communities have an opportunity to benefit in appropriate ways.

To be eligible for funding, all Community Projects must be approved by: l.) The Associations of Governments, 2.) The Director of the Governor’s Office of Planning and Budget, and 3.) The Quality Growth Commission. In addition, they must be consistent with the Quality Growth Act of 1999.

Initiative 1 will not take away funding needed for schools, university buildings and highways.
Sales tax is not earmarked to pay for schools, university buildings or highways.

Because Initiative 1 will authorize a new, separate sales tax, it will not compete in any way with these other public purposes.

Sales tax is an appropriate funding vehicle to pay off Initiative 1 bonds.
All Utahns, from every walk of life, benefit from clean water, clean air and the preservation of our natural heritage. Sales tax is an equitable way for all Utahns to help make this investment.

Tourists also enjoy and benefit from our natural lands. Through a sales tax increase, tourists will pay their fair share to protect Utah’s wildlife and recreation lands.

Initiative 1 is a good investment.
Bonding to achieve public purposes now – by borrowing at 2% to 3% while land prices are rising at 8% to 10% – makes good financial sense.

If we wait too long to protect our natural heritage, critical lands will be lost to development and/or priced out of reach.

Interest payments over the life of the bonds may come to +/- $32 million, but this increase will be offset many times over by protecting Utah’s clean water and critical lands now when they are still affordable.

In the long run, Initiative 1 will save taxpayers millions.

Initiative 1 is affordable.
Initiative 1’s 1/20th of one percent sales tax increase will cost the average Utah family only $14 per year.

The tax increase proposed is temporary. It will terminate after the bonds are paid off – in approximately 10 to 13 years.

In annual bond payments, the State typically pays more than the entire bond amount authorized by Initiative 1.

Sales tax revenue bonds are constitutional, advantageous and commonly used.
Initiative 1 was written by Blake Wade, with Ballard Spahr, bond counsel for the State of Utah. It was reviewed by the Office of Legislative Research and General Counsel, the State Elections Office and the State Attorney General.

Nothing in the state constitution prohibits the issuance by the state of sales tax revenue bonds. In fact, this financing vehicle is already being used by many municipalities in Utah – and is common practice in other states.

Kent Mitchie, Sr. Vice President of Zions Bank has stated, “Though we have no formal position pro or con on Initiative 1, I do want to verify that sales tax revenue bonds are an innovative, well secured source of public finance. I would like to see these vehicles used more often to fund worthy public projects around our state.” Zions Bank is the chief underwriter for bonds issued by the State of Utah.

Initiative 1’s payment in-lieu of taxes provision makes sense.
Certain state agencies (such as the Division of Wildlife) are already required by law to make in-lieu of property tax payments to Counties where they own land (Utah Code 23-21-2).

This is a positive requirement which will prevent conservation projects from eroding the tax base of local communities. It will also incent project proponents to favor the use of conservation easements over the acquisition of land in fee.

Initiative 1 funds will be administered professionally and fairly by The Utah Quality Growth Commission.
The funds raised through Initiative 1 will be allocated, on a competitive application basis, by the Utah Quality Growth Commission – an entity created by the Legislature which has a solid, multi-year track record of awarding conservation grants and administering similar funds.

The Quality Growth Commission consists of 13 members appointed by the Governor, six of which must be elected officials. Two of these members must be individuals selected by farm organizations. (Ironically, the Farm Bureau currently has a seat on the Commission. Conservation interests do not.)

No new bureaucracy will be created. Initiative 1 endorses a proven, existing commission structure.

Initiative 1 has tough oversight provisions.
All Initiative 1 expenditures, as approved by the Quality Growth Commission and State Bonding Commission, will be subject to annual audits and Legislative review. An annual report to the Legislature is required and Legislative leaders and local elected officials will play key roles in endorsing and reviewing potential projects.

We don’t have “enough open space already”; nor will Initiative 1 “lock up” large tracts of private land.
Initiative 1 is not about wilderness or public lands, it’s about protecting key private lands with watershed, wildlife and agricultural values – the lands where we live.

Initiative 1 is also about much more than just land protection. HEALTH: it will help keep toxic chemicals and pollutants out of our water supply and provide incentives for clean water and clean air; COMMUNITY: it will help local communities build trails, parks and recreational facilities; PLANNING: it will provide local governments with planning funds to guide growth wisely; LAND MANAGEMENT: it will help landowners fight noxious weeds, enhance wildlife habitat, improve wetlands and address critical land management needs. Example: Initiative 1 funds could help keep the Sage Grouse off the Endangered Species List – an issue of vital importance to rural Utah.

Initiative 1 emphasizes quality, not quantity. To preserve just 5% of Utah’s irrigated farmland would cost $651 million. The $150 million provided by Initiative 1 will only be able to protect a small portion of the critical lands at stake. At the end of the day, the question will not be does this do and protect too much, but should we have done more?

The Quality Growth Commission administering Initiative 1 has adopted a “no net loss of private lands” policy to guard against the loss of private lands.

Existing programs are NOT enough. It is misleading to suggest “Various State and Federal programs have invested $1.5 billion in Utah open space, water quality and conservation over the last decade.”
The Farm Bureau's $1.5 billion claim factors in greenbelt property tax breaks for agriculture. This is a great program, but it does not protect open space or ag land permanently. Rather, farmers are given a tax break until they sell-out to development.

Federal programs do exist (e.g., CRP and WRP) but these are largely temporary lease programs – and again not permanent.

In recent years, conservation bonds have passed in Nevada ($200 million), Colorado ($170 million) and Arizona ($173 million) – while Utah's only state source for this purpose, the LeRay McAllister Fund, has been cut 74% by the Legislature to less than $800,000 today.

The Farmland Protection Program (FPP), part of the new Farm Bill, does have the potential to bring $3 to $4 million annually to Utah for conservation easements - but this program requires a 1:1 match. Initiative 1 funds will provide this match. Without it, FPP monies will go begging.

It is appropriate to provide funding for museums.
$5 million will be available to fund projects submitted by the State Museum of Natural History – this is just 3% of the total.

Museums of natural history contribute to the protection of Utah’s natural history in three ways: SCIENCE: Museum science programs and sensitive species inventories help set rational priorities for conservation and inform decision makers about natural resource use. COLLECTIONS: Museums have natural history collections which are valuable sources of information about Utah’s lands and waters. EDUCATION: Museums offer education programs which teach all Utahns about our unique natural heritage.

A statewide approach is best.
Utah's clean water, clean air and open space benefits all of us, so it seems only fair that all of us should invest in their preservation.

The natural world knows no political boundaries, so neither should our land and water protection efforts. Watersheds and wildlife, rivers and wetlands – to efficiently preserve many natural features, a regional approach is needed.

Numerous attempts to secure Legislative approval for local option sales taxes have failed. In Cache County, where this opportunity has existed, the County Commission has refused to place a local option on the ballot for years.

Summary
This is a great opportunity for Utah – it is the first time Utahns will have the opportunity to protect what makes Utah special – our mountain forests, canyon lands, our clean water to drink and clean air to breathe. Initiative 1 will provide the resources we need to adequately plan and prepare for the projected 1 million people we will add to Utah’s population in the next 15 to 20 years. Initiative 1 is an affordable way – $14 per year per family – to protect our quality of life now and pass Utah’s natural assets on to our children and grandchildren. All of this will be done through a citizen’s commission with tough fiscal audits and legislative oversight.