Tooele Transcript Bulletin – News in Tooele, Utah

May 14, 2019
There are those of us who are old, tired and taxed-out

In the April 25 edition of the Tooele Transcript Bulletin there were two notices of recent activity by the Tooele City Redevelopment Agency. They did not offer data on county property tax impact. 

Tooele City’s long use and perceived misuse of RDA (now CRS) development has diverted millions of property tax dollars away from Tooele County School District funding in the city’s effort to lure business. The school district over time has allowed/approved this monetary diversion while increasing its bonding activity. A contributing result is that soon taxpayers will be confronted with the most expensive school bonding in our county’s history.

Tooele City, the principle RDA user, has a unique method for securing business. Its city council members are the RDA board, so all “investment incentives” that are proposed also are approved. But the city’s actions affect all Tooele County residents. Tooele RDA initiators tell their constituents that it’s not taxpayers’ money that is being spent, because the money for this activity does not come out of the city’s general fund. 

Although the city may not be initially harmed by its RDA taxing deferments, the RDA incentive money does come at a cost to county taxpayers. Resulting RDA tax deferments represent monies that could be applied to lower the tax burden on county property owners. There’s just too much money that is bypassing normal government budgets. These off-budget corporate incentives traditionally have been heavy on financing administrative costs that do not produce a measurable public benefit, e.g., producing livable paychecks for city or county citizenry.

A Transcript Bulletin June 5, 2012, editorial reported that “Tooele County School District is the largest beneficiary of property taxes, collecting in some areas of the county 60 percent of all property tax paid. While Tooele City expends half of its RDA budget on administrative expenses, the school district struggles to balance its budget to meet demands of growth each year.” 

This reference was in 2012 when the school district was proposing a 22 percent increase in the property tax rate. The need for this increase, which exceeded the Utah rate standard, was blamed on the state lowering its payment for capital projects. But its RDA participation cannot be dismissed as a contributing cause. The bonding result was cited as being necessary for debt service and capital levies totaling “$29.7 million in outstanding debt.” 

Yet, the school district continued and has remained a participant in RDAs that, to date, waive property tax use for years. The unverified hope is that RDA developments with taxing waivers eventually will produce monetary rewards when the only thing that can be confidently predicted by the school district is student growth, and that is owing to the county’s available land mass.

The historical use of RDAs has existed to aid business growth for increasing taxing revenue and providing employment opportunities. They have assisted the private sector in revitalizing deteriorating and blighted areas. A current Tooele City RDA is restoring an apartment building for low-cost housing purposes. But cautious use of RDAs would have prevented some California cities from going bankrupt with overuse. 

There are laws for RDA/CSR governance that are meant to protect taxpayer exploitation. There should be an initial survey of any proposed RDA project, followed by a plan/proposal for it, accompanied by public hearings prior to adoption. Any RDA every five years should be revisited for compliance and progress, its implementation plan reviewed, assessed and updated to establish more specific goals and projects for the next five-year time period. If this procedure had been followed by Tooele City, its Downtown Project RDA would not have extended after 25 years of reduced property taxes. 

RDAs are not empowered to levy new taxes, increase them or change the resulting tax increment that could result in its gaining a larger share of revenue increase over the life of the RDA project. There is a formula attached to each RDA that governs its compliance and the termination of its redevelopment plan. This plan dictates the allocation of property taxes among all of the affected taxing entities and ensures the RDA reverts back to the formula in place when the plan started. RDAs require careful administration, especially for monetary compliance.

RDAs are popular, but if not well-managed, may not reap the public benefits to municipal growth and its citizenry. The public good that is generated from this activity should be able to be reflected in dollar relief to property owners who pay the bills. Successful tracking activity can document the impact on school revenues — and this should be known in dollars. It should be known if a taxing entity using RDA had to borrow money or issue bonds for that or because of that purpose. Reporting requirements should result in civic not private benefit. Also, its use should not assist property degradation for lowering taxing evaluations. This data should have public access in a format that can be understood. To date, such data is lacking, and little attention has been paid to full public disclosures by Tooele County, Tooele City, or the school district.

Tooele County’s open RDAs have long lives, some up to 25 years, and there may be a dozen of them dispersed among our taxing entities. But who knows for sure? Any existing tracking data at minimum should reveal a project’s yearly taxable value from its base year, its incremental available tax exemption and contribution, and its effect on the total tax pool. 

Without public data from these taxing entities, there is insufficient justification to initiate a call for more public taxation. Until the taxed public knows more about the numbers and mechanics of RDA/CRS activity, it will be relying on emotion rather than fact in assessing the upcoming school bonding issue. 

Yes, we love our children, our country and county, the poor and homeless — and our businesses and entrepreneurs. But there are those of us who are old, tired and taxed-out. At some point we must love ourselves, too.

Carolyn Palmer is a resident of Stansbury Park.

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