Senate approves fee increases to fund new court complex after lengthy debate over bonds

The Utah State Senate voted to pass First Substitute Senate Bill 48 on Jan. 27, 1995, approving adjusted court filing fees legislators say are needed to finance a new state court complex.

Senator Steven Reese, sponsor of the fee bill, summarized competing financing scenarios and urged senators to consider timing and cost when deciding whether to delay the measure. ‘‘If we use the 20-year revenue bond option ... the principal payments would be $132,000,000 that would be paid if we approve the bill as it's being presented to us now,’’ Reese said while comparing alternatives for general obligation bonds and revenue bonds. He warned that delaying construction could increase costs through inflation and lost savings, and he argued that user fees would cover a large share of the complex's cost.

Opponents pressed for more time to examine the bond structures and the bill's language that directs fee revenues into a restricted account. Senator McAllister urged the chamber to review alternative bond structures and the distribution of reserve funds, saying elected officials ‘‘need to sit down and have an in-depth dialogue’’ and asking staff for numbers to review in caucus. Several senators argued that selecting a revenue bond versus a general-obligation bond would materially change total interest and principal paid and could affect whether fees must be returned to the general fund.

Central to the debate were specific cost comparisons offered on the floor. Senators discussed a 20-year revenue bond scenario that would total roughly $132 million in principal, a 6-year balloon revenue approach with a large payment in year six, and a 6-year even-payment general-obligation option with principal and interest estimates nearer $76.2 million. Senator McAllister said a balloon payment could force a roughly $60 million single payment in the sixth year, while others said even-payment approaches would spread the cost more manageably.

Supporters said the bill allows user fees to fund an estimated 63 percent of the complex's cost. Senator Reese told colleagues the measure ‘‘would allow about 63 percent of the cost to be borne by user fees,’’ and he argued ownership would save roughly $40 million compared with leasing over 25 years, based on a University of Utah analysis he cited.

Opponents expressed concerns about fairness for rural counties and about whether routing fee revenue into a restricted account would preclude using the funds to support a general-obligation bond. Senator Montgomery said that without fee-generated revenues the general-obligation route ‘‘would never pass’’ the bonding committee and that failing to adopt the fee structure could effectively kill the project.

After extended debate and procedural votes, the Senate recorded a roll call and the President announced that First Substitute Senate Bill 48 passed, 17 ayes to 12 nays. The bill will be transmitted to the Utah House of Representatives for further consideration. Senators asked staff to produce detailed financial comparisons and scheduled caucus review of bond options early next week.

The Senate also made several procedural requests tied to the bill: senators asked staff to confirm whether the bill's language creates a new restricted account for fees and how that would interact with a potential change to general-obligation financing. The chamber agreed to review numbers in caucus before further action in the legislative calendar.

The Senate's vote followed a broader floor discussion about the project’s history, estimated savings from constructing rather than leasing, and the political ramifications of reversing prior commitments. Senators emphasized that while fiscal mechanics differ between financing methods, delaying construction could increase costs and jeopardize previously negotiated contract savings. The House will now consider SB48 and any amendments it may propose.