From Deseret News archives:

Tax-shift plan targets RDAs

Published: Monday, Oct. 10, 2005 9:32 p.m. MDT
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"South Jordan gets killed, and the reason they do is because they have a lot of RDAs in the city right now. They are just being subsidized by all of the other cities to make sure that South Jordan gets their nice development," Sipos said.

But Sipos noted that cities who may see immediate tax increases to fund an RDA will also likely see more sales tax revenues coming into the city from the new development. That in turn could lead to eventual tax decreases in the city, he said.

"It doesn't raise taxes at all. It shifts taxes to the people who are benefiting from the RDA," Sipos said. "Right now there are people in Monticello and Moab who are funding these far-flung RDAs in Salt Lake City."

Mike Jerman, vice president of the Utah Taxpayers Association, applauded Thomas' idea for solving the problem of tax dollars being diverted from school districts for city benefit. But Jerman added that the plan does not address several of the other fundamental problems with RDAs.

Most notably, there is no solution to misuse of RDA money by city leaders who often stretch the definition of "blight" to get RDA funds, Jerman said.

Thomas' plan would allow cities to use the RDA tax levy for community and economic development projects. RDA funds are currently not supposed to go towards such projects; they are only supposed to go to rejuvenate blighted areas.

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But Sipos said cities are already abusing RDA funds. Thomas' proposal, he continued, only admits this is happening and makes the city alone pay for it.

"We're not playing this game anymore where people get to say one thing and do another," Sipos said. "At least the citizens know who is responsible for living up to those promises and know how much is being paid for it."

Leaders at the Utah League of Cities and Towns also have a plan to pitch to the Legislature this year on how to reform RDAs. Thomas' proposal could be an element of that plan, particularly in dealing with projects that still need money after an RDA funding agreement has expired, said Lincoln Shurtz, legislative analyst for the league.

Shurtz added, however, that the plan may not be as simple and streamlined as Thomas pitches it. For example, cities will still have to coordinate with school districts to determine tax rates, he said.

"We don't really avoid any of the hassles, it just provides little bit more transparency," Shurtz said.


E-mail: estewart@desnews.com

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