Changes in RDAs could aid cities

Even though the legislative session is still more than four months away, the Utah League of Cities and Towns is working on language for a bill that could overhaul the way cities direct development.

The league, which serves as a lobbying agency for the dozens of municipalities throughout Utah, has been working with Sen. Curtis Bramble, R-Provo, and a legislative working group to split redevelopment agency projects into three types, which cities could then fashion to their specific needs.

Millions of sales tax dollars pour into city coffers each year, and often those cities woo developers and large retailers by creating tax incentives for them to build within their borders. Those incentives pit neighboring cities against each other for the same stores that would likely come to cities without the tax incentives, lawmakers have said throughout months of interim meetings.

But when municipalities offer the tax breaks, it reduces revenues for schools and other entities that would share in the tax income.

During the 2005 legislative session, Bramble successfully carried a bill that eliminated cities' abilities to use eminent domain in redevelopment agency projects, or RDAs. Bramble also vowed to overhaul RDAs, and he has chaired an interim task force on tax reform. Now, approximately half-way through the interim period (the 2006 legislative session begins in January), Bramble and the task force are starting to think about specific bill language.

Most of that language will come from the league, which has proposed splitting one type of RDA into three: economic development, redevelopment and community development.

"As we found, no two communities were alike," said Lee King, Midvale city administrator, at a meeting of the RDA working group Thursday.

Currently, RDAs create development incentives by setting a base tax rate and then collecting money over that rate for approximately 20 to 25 years. The RDA spends the increment money on infrastructure improvements — roads, sewers, curbs, gutters, etc. — within the boundaries of the project. But because the RDA project pulls taxes away from the agencies that would ordinarily collect it — school boards, counties and other taxing districts — sometimes those taxing entities object to the projects.

Under the current system, the schools, counties and other taxing members cannot individually opt into or out of the project; they can only vote as a bloc to approve or reject the project.