RDA bill may help schools, hurt Real

Lawmakers are hoping a reform on redevelopment agencies will encourage economic development but keep a healthy flow of property tax dollars flowing to school districts and counties.

A bill sponsored by Sen. Curt Bramble, R-Provo, would use a three-track process for cities to still bring in developers with tax incentives but with a tighter rein on the amount of tax dollars used. The bill also makes it possible for recreational facilities, like the Real soccer stadium, to be built in a city — but only with the cities' dollars.

"I believe using school district money was absolutely unacceptable," Bramble told the Deseret Morning News. "Why are we encroaching on schools to fund soccer stadiums, sports arenas, performing arts centers?"

An RDA allows local governments to cure blighted areas by diverting property taxes into city rejuvenation projects. However, legislators and educators have spoken out against RDAs, because it denies school districts their 50 percent to 60 percent cut of property taxes.

"These three approaches, and having a more custom fit tool for cities to pursue economic development, I believe is very positive," Bramble said. "It eliminates much of the abuses."

Bramble argues RDAs have been exploited by cities to lure big developers, and by tightening the law, school districts can opt out of RDA agreements to retain their portion of tax revenues.

Last year, a watered-down bill on RDAs was approved that put a one-year moratorium on all RDAs funding retail growth. The bill also prohibited RDA dollars going toward recreation centers, like soccer stadiums. In addition, the bill eliminated the use of eminent domain in RDA areas to seize private property.

The reform now gives cities a multifaceted approach to using RDAs, while still protecting property tax dollars school districts rely on. The three areas are:

• Economic Development Area (EDA): "Meaningful job creation" of jobs that are high-paying and above average wages in the area is the sole focus of an EDA. Property tax increment is granted, if there is a two-thirds vote from the taxing entity committee, but no increment is allocated for retail development.

• Renewal Development Area (RDA): Removing blight will be possible through a renewal project, but blight must be quantifiable through a specific, strict definition. Property tax increment will be granted for the entire project area, but this requires a two-thirds majority vote from the taxing entity committee.