Local government officials may have difficulty remembering this far back, but when redevelopment agencies were first begun, they were intended as tools to revitalize blighted neighborhoods and help the poor. Today, Utah's many cities and counties are more likely to use them as tools to lure big-box retailers to vacant fields or to bring a professional soccer stadium to a commercial district.
More likely than not today, developers and local governments are helped. The poor, and other taxpayers, are hurt.
Perhaps there are other laws that governments have twisted and bent more badly out of shape for political purposes through the years, but none comes to mind. Through the powers of eminent domain, governments have forcibly yanked property from one owner, at a "fair market value," and handed it to another who is wealthier. Some of the former owners who have had the stomach to take their grievances to court have won substantial judgments but only after years of agony.
A magazine shop owner in Main Street in Salt Lake City held out amid intense pressure and scorn and eventually won a $2 million settlement. A property owner in Midvale held out and eventually won against the county and a huge retail shopping center but at great personal cost.
It's good, then, that 14 state lawmakers have asked the Legislative Auditor General to do a statewide audit of RDAs, looking at how they do what they do and whether there is enough oversight. The timing couldn't be better, now that state lawmakers have imposed a one-year moratorium on RDAs for retail development and sports arenas.
But lawmakers and others shouldn't be surprised if the audit comes back with the same general conclusions as the last one, conducted in 1991. That one said that, yes, RDAs are used to boost tax revenues rather than to eliminate blight, and, yes, they are being used more to lure retail than anything else. But it also determined that some RDAs have helped economic development and shored up a city's bottom line.
In the end, the RDA debate comes down to a matter of philosophy. It becomes a question of the proper role for local government, as well as a test of a public official's understanding of basic economic principles.
Some community leaders will argue that, without the incentives of an RDA, retail growth would never happen. Clearly, this is wrong. Retailers are drawn to markets like prospectors to a gold claim. If jobs and growth come, stores and shops will follow. Each time a city or county uses redevelopment money to lure a retail development, local school districts lose out on the property taxes that new development would have generated on its own.
On the other hand, an RDA or an economic development agency that attracts new, high-paying non-retail jobs from out of state may indeed be worth the trouble, especially if it also revitalizes an area.
In many ways, the RDA problem has its roots in Utah's overall tax system, which allows cities to keep 50 percent of the sales tax revenue generated within their borders. This gives cities an incentive to do all they can to lure retailers, even if it means luring some from neighboring cities. The new Tax Reform Task Force, which will begin meeting next month, should devise a simpler way, based more on population, to distribute these funds.
Maybe then cities would concentrate more on revitalizing run-down neighborhoods than on getting a rich developer to build a store on vacant land.