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SALT LAKE CITY (AP) -- Using redeveloping agency money to lure retailers to cities takes tax revenue from schools and cities, but is necessary to attract the businesses, cities argue.
The tax incentives aren't needed, said Mike Jerman, vice president of the business-backed and business-oriented Utah Taxpayers Association.
"Utahns are very good at buying things, and the market is good at responding," Jerman said. "Retail does not need to be incentivized."
The issue was discussed Tuesday at the organization's annual meeting in Salt Lake City. It comes as a legislative Tax Task Force studies the state's use of property tax increments for development.
Cities use RDAs to divert property taxes to project areas for infrastructure and development.
Sandy redevelopment director Randy Sant said those tax increments are vital to recruiting strong retail that brings jobs and economic growth in tow.
"Unless we have incentives, we're not going to bring business into the state of Utah," he said. "We can have all the educated people we want in the state, but if we can't build the infrastructure, we won't have economic development."
Jerman said about $98 million in property taxes has been diverted to Utah RDAs this year, nearly half of which would have gone to schools.
"That's $49 million, right now, the schools would obviously like to have," he said. "We're already seeing a significant erosion of the property tax base."
Jerman also said city leaders are abusing the definition of blight the criteria for creating RDAs by labeling open fields and prime real estate as blighted.
"The truth is we don't have a lot of blight in Utah," Jerman said. "Why raise taxes to pursue open space and then subsidize developers to develop it?"
He said using RDA funds to subsidize retail development is like musical chairs because economic activity is often shifted from one community to another without any long-term benefits.
Sant said RDAs can provide water and sewer infrastructure to a development that can be used by other businesses.
He said most Utah RDA projects have centered on providing infrastructure for retail projects or economic development activities such as improvements at business parks.
(Copyright 2005 by The Associated Press. All Rights Reserved.)
