Tooele Transcript Bulletin – News in Tooele, Utah

October 11, 2018
School board reluctant about tax incentives to lure more business

Getting the Tooele County School Board to participate in more property tax incentives to help lure large businesses to Tooele County will be a hard sell.

In response to a request for direction from their business administrator during their Tuesday night meeting, all seven school board members expressed hesitancy to support future participation in tax increment financed incentives for business.

“It’s hard to tell taxpayers, that have already supported us by approving a tax increase, that we are being frugal and we need to build schools and, by the way, we’re giving $3 million to $6 million to companies so they will come into our valley,” said Tooele County School District Superintendent Scott Rogers. 

Tax increment financing involves freezing the property tax distributed to taxing entities from property in a redevelopment agency project area to the amount distributed at the time the project area is formed. As the project is developed and the property value increases the additional property tax collected goes to the RDA for the city or county where the property is located. 

The RDA may use the property tax for infrastructure development in the project area or it may be refunded back as an incentive for locating the business in the RDA area.

The tax incentives usually have a cap, either in total dollars or they expire after a set number of years. Performance requirements such as number of jobs and average wages are often part of a tax incentive agreement.

“I would not support adding more tax burden on our citizens and our small businesses that continue to pay taxes,” said school board member Carol Jensen. “Unfortunately it hasn’t always worked out to the benefit of the school district. They come and then they leave and want their money back.”

Allegheny Technologies Incorporated opened its Rowley titanium plant in 2009 with a tax-increment financed incentive that returned about 90 percent of its property tax.  

The maximum amount of the tax incentive was reached in 2016. ATI stopped production at the Rowley plant at the end of 2016, claiming changes in the world market for titanium made it cheaper for the company to buy titanium than to produce it.

ATI appealed its 2017 property tax assessment of $160,113,610 to the Utah State Tax Commission. Tooele County approved an agreement with ATI in August that lowered ATI’s 2017 assessment to $60 million. 

The agreement required taxing entities to refund around $1,335,000 in 2017 property taxes to ATI. The school district’s share of the refund was estimated to be near $913,000.

School Board Chairwoman Maresa Manzione said she would have a hard time voting for more tax incentives.

“I feel topped out,” she said. “Businesses bring growth, and I appreciate them coming, but if they bring the growth, we have to plan for and build for that growth without the tax revenue. It does not help our district.”

In 2018, over $2 million in property tax revenue was collected that went to RDAs as tax increment financing, instead of to the Tooele County School District, according to the school district’s financial statements.

School board member Scott Bryan also feels the district has reached the limit of its support for tax incentives.

“I really would be hard pressed to vote for another tax incentive,” he said. “I don’t care how good the deal is or what the company is.”

School board member Kathy Taylor agreed.

“We should spend our money on our schools,” Taylor said. “Citizens are already putting their tax dollars into here. We shouldn’t take their tax dollars and put it where they didn’t decide to put it.”

Giving away property tax from new development seemed counterproductive to school board member Julia Holt.

“The only benefit we get from economic development, which we want, is the taxes to support schools,” she said. “If we’re giving away the taxes there is no benefit.”

School board members Alan Mouritsen and Karen Nelson were not opposed to at least listening to tax incentive proposals.

“I would like to consider it on a case-by-case basis, as opposed to sending the message that we don’t want any further conversation,” Mouritsen said.

“I am reluctant to enter into any more RDAs, but I am willing to listen to proposals,” Nelson said.

Lark Reynolds, the school district’s business administrator, said he was seeking the board members’ opinions because he has been participating in meetings with the county and other government agencies where they have been discussing five RDA project areas and prospective tax increment financing.

Those project areas are: a proposal by the The Romney Group to develop 900 acres east of the Utah Motorsports Campus, Broadway Street in Tooele City, Tooele City’s retail project west of Main Street on 1000 North, the Industrial Depot area, and Tooele City’s business park near Utah State University – Tooele Regional Campus.

The school board approved participation in Tooele City’s retail project on West 1000 North in December 2017.

If the project meets expectations, it will generate $6 million in property tax revenue intended for schools over the 15-year period life span of the tax incentive. The school district agreed to let Tooele City’s RDA keep $1.25 million of that future revenue as tax increment financing.

“We are being asked in our communities in Stansbury and Tooele for a new high school and in Grantsville for a new elementary school,” Rogers said. “We need more seats. We’re getting crowded. It’s hard to recommend to give that property tax away to corporations when our communities need it.”


Tim Gillie

Staff Writer at Tooele Transcript Bulletin
Tim covers education, Tooele City government, business, real estate, politics and the state Legislature. He became a journalist after a long career as an executive with the Boy Scouts of America. Tim is a native of Washington state and a graduate of Central Washington University.

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