Redevelopment Agencies Will Be Audited

Redevelopment Agencies Will Be Audited

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SALT LAKE CITY (AP) -- At the request of 14 legislators, the legislative auditor's office will begin a statewide investigation of redevelopment agencies next month.

At the same time, the Tax Reform Task Force tries to tackle potential abuses of RDAs.

"Some of the issues with redevelopment agencies are raised as apocryphal stories. Some are issues that I've seen firsthand of abuse. And some are situations where the municipalities have really done some good things," said Senate President John Valentine, R-Orem. "I thought it was best to have the actual facts before us."

RDAs, which funnel property taxes from new developments back into those projects and away from taxing entities like school districts, have remained in the legislative spotlight after a new law put a one-year suspension on any RDAs used for retail development.

The bill also prohibited use of RDA dollars for recreational projects like soccer stadiums.

According to estimates by the Utah Taxpayers Association, more than $90 million in property tax was kicked back to developments this year via RDAs. Nearly half of that figure would have gone directly to school districts.

Sen. Curt Bramble, R-Provo, who sponsored the RDA reform measure, said examination of the approximately 80 RDAs throughout the state is long overdue.

Many cities have been allowed to get away with misusing and misdirecting public tax money, he said.

"We would really like to get some credible, verifiable data on how RDAs are managed," Bramble said. "We need to get a solid baseline."

The scope of the audit has not yet been defined, but the legislators' petition for the audit requested an examination of RDAs sought to uncover any that may not be in compliance with state statutes and also identify those that are not operating at the least cost to taxpayers.

Both of the issues are at the heart of RDA abuse, said Robyn Bagley, who formed a grass-roots RDA reform group in Sandy that pushed for the audit.

Other central problems with RDAs that will likely be addressed by the audit are whether diverting property taxes forces an increase in tax rates and if there is adequate legislative oversight of RDAs.

RDA originally were intended to encourage development in rundown areas, but are being used to recruit retail developers on prime real estate, said Mike Jerman, vice president of the Utah Taxpayers Association.

He said that allows cities to steal retail from each other instead of bringing any new economic growth to the state.

"We've been documenting blight or pretend blight, but having an official audit will hopefully strengthen our case for RDA reform," Jerman said.

(Copyright 2005 by The Associated Press. All Rights Reserved.)

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