A bill that would change the way sales tax revenue is distributed among cities passed the Senate on Wednesday.

Sen. Greg Bell, R-Fruit Heights, sponsor of the bill, said it would resolve inequities in sales tax revenue between cities like Ogden and Riverdale

Riverdale, population 8,000, receives 20 times as much sales tax revenue per resident as Ogden, population 78,000. This is because of Riverdale's high concentration of retail and a 23-year-old provision allowing cities to choose one of two formulas for computing sales tax revenue.

To protect cities like Riverdale, which depends heavily on the revenue in its operating budget, the bill would gradually phase out the provision over seven to 10 years.

"I feel like we've bent over backwards to ameliorate the effect for every city and every county," Bell told fellow members of the Senate. "We've really tried to take into account every situation with this law."

The bill passed the Senate, 24-1. Sen. Scott Jenkins, R-Plain City, cast the lone dissenting vote and four members were absent.

Jenkins said Riverdale is in his district and he wanted to consult with officials there before deciding how to vote when the bill is read a final time in the Senate today before going to the House.

"It was represented that this was a consensus bill," Jenkins said. "I could very well vote yes tomorrow. I want to talk to them, see what they think."

Bell said the bill represents a compromise negotiated over the last few years with the Utah League of Cities and Towns.

Currently, cities can choose between a formula based solely on where sales occur, or point of sale, and one based half on point of sale and half on population. The provision wrongly promotes competition among cities for sales tax revenue, which in turn has led to incentives for retail businesses, sprawl and unfair distribution, according to Bell.

Under the bill, cities would receive whichever is greater each year through 2012-13: sales tax revenue based half on point of sale and half on population, or the amount they received in 2004-05.

Cities still suffering adverse impacts from the change would be eligible for further concessions through 2015-16.

John Wright can be reached at jwright@standard.net.

First Substitute SB 35: Local Option Sales and Use Tax Distribution Amendments

Sen. Greg Bell, R-Fruit Heights

This bill would change how sales tax is distributed to cities, counties and towns.

This story appeared in The Daily Herald on page A9.