Salt Lake City mayor seeks record $512M budget but warns of ‘economic uncertainty'

Yahoo

07-05-2025

Utah's capital city general fund could surpass $500 million for the first time this year, but Salt Lake City Mayor Erin Mendenhall warns that her proposed city budget is also 'shaped by economic uncertainty.'
The mayor revealed her proposed $512.4 million budget during her annual address to the Salt Lake City Council on Tuesday, a potential 6.7% increase from the previous year.
But that was after she referenced a 'volatile' stock market and 'fluctuating' tariffs mixed with increasing costs and a declining consumer sentiment index that she says the city will have to monitor closely.
'This is my sixth budget proposal, but — in many ways — it feels like the first of its kind since the early days of the COVID-19 pandemic,' she said.
Despite these potential challenges over the next fiscal year, her proposal includes no property tax increases — for now — as she looks to focus on public safety, infrastructure and affordable housing in a way that allows the city to function 'steadily, reliably and responsibly.'
Residents will still likely see fee increases for water, sewer, stormwater and street lighting infrastructure, which could amount to about $10 a month for 'low water users' if the budget moves forward untouched.
Big budget items
Most of the budget is tied to city workforce, as usual. Of new expenditures, the mayor is recommending that $5 million go toward affordable housing, split between the general fund and the Community Reinvestment Agency.
Other key requests include:
$3.9 million toward completing seven projects tied to the public safety plan she released earlier this year. It includes $500,000 for overnight security at several parks across the city.
The creation of a new 'clean city' team that will seek to clean up trash, graffiti and other problems in 'neglected' public spaces. A $5.2 million ask for new vehicles has been moved up to an adjustment to the current fiscal year to help avoid possible tariff increases, per the mayor.
$2.7 million toward 'west-side-focused investments' tied to parks, green spaces and street lighting on that side of the city. There's $400,000 proposed to improve the historic Fisher Mansion, setting it up for future 'year-round activation.'
$2.3 million for road safety projects tied to Redwood Road, 900 West and 800 South.
$200,000 to begin 2034 Winter Olympics 'legacy funding.'
Yet, to make the recommendations without raising taxes is tied to the departments that 'dug deep' to consolidate and cut costs, including identifying health care plans that helped the city trim cost increases from 11% to 7%, Mendenhall said. Some departments used these cuts to provide access to programs after the city lost out on federal funding, while what was proposed was influenced 'almost entirely' by inflation and the rising costs.
'This budget leaves no stone unturned when it comes to keeping our residents safe, lowering costs and finding creative solutions to even the most complex obstacles,' she said. 'No amount of uncertainty will change who we are or how we serve.'
State of finances
The mayor delivered her proposal hours after her administration offered an update on city finances to members of the Salt Lake City Council, who carry the final say on the city's budget.
Projected increases in tax revenue, including an $8.6 million increase in property tax and $6.6 million sales tax, which are tied to a portion the city receives from the Utah Inland Port Authority and increases to Rocky Mountain Power rates, respectively, account for the recommended budget increase, said Andrew Reed, Salt Lake City's deputy budget director.
Projected growth in licenses and permits and various fund transfers make up a projected revenue shift of $38.8 million, making up most of the anticipated budget increases.
However, Reed said the city is still monitoring potential impacts from proposed tariffs and anticipated decreases in tourism, after he was questioned about it. He added that the city cut funding during the COVID-19 pandemic, but it ultimately became a budgeting 'mistake.'
'There is some uncertainty — fair to say I don't really know moving forward, and I don't think anybody really knows,' he said. 'Our city is in a very healthy place, but we do need to be considerate moving forward.'
Consumer confidence is another key figure the city must focus on, added Mary Beth Thompson, director of the city's finance department.
At 80%, Utah's consumer confidence remained well above the national average of 52% in April, per the University of Utah Kem C. Gardner Policy Institute's latest report. The statewide figure is down by 11 percentage points since January, while the nationwide figure slid 19 percentage points over that time.
The nationwide decline appears to be tied to 'perceived risks' associated with trade policy, potential inflation and the labor market, said Joanne Hsu, director of the Surveys of Consumers at the University of Michigan, who helps oversee the report, after the April report was released.
People tend to spend less once confidence drops, which creates a negative impact, Thompson explained.
'That's when our economy hurts,' she said. 'It's the uncertainty of what's going on in the economy more than the tariffs themselves.'
Members of the City Council appeared uneasy as they pondered those questions during Tuesday's meeting. Those are external factors they will have to consider as they craft the final city budget.
Those unknowns could impact city services, parks, roads and other major projects, Salt Lake City Council Vice Chairman Alejandro Puy said.
'I want to make sure that we're not budgeting to spend more money that we may not have,' he said.
The City Council has until the end of June to finalize the budget before the fiscal year begins in July. A pair of public hearings on the budget are also planned for the City Council's formal meetings on May 20 and June 3.