Tax Increment Financing For Main Street Is Misguided

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I take issue with the Roundup's editorial of April 13, "Let's invest in Main Street." I really don't have any strong opinion as to whether or not the Town of Payson invests in Main Street. I think that is something for the people of Payson to decide.

However, the way the Town Council is going about it, the people of Payson are not going to have much say in the matter. The proponents of the plan are proposing that all property tax revenue increment, from a sizable portion of the town, for the next 20 years, be retained by the town government and re-directed to infrastructure improvement in this section of the town.

There are several problems with this approach, as I see it:

The town is being very cavalier with other people's money. Of the total property tax collected in Payson, only 4.6 percent goes to the town. So the town is asking the other 95.4 percent of the recipients to do without for 20 years, while the town masterminds the spending of their revenue.

The other recipients are: education, 55.3 percent; county, 32.6 percent; sanitary district, 6.6 percent, and fire district, 9 percent.

Of course, during this 20-year dry period for the other recipients, they can, as the town points out, raise their tax rates to make up for the difference.

Your editorial says that this increase in tax rates will be minimal. If this is the case, why doesn't the town raise the money itself, rather than forcing other government entities to raise their rates? It sounds to me as though the proponents want to confuse the issue, so that we never will know what all this costs and where the money goes.

The whole proposition also seems to be based on the questionable assumption, that if the town government doesn't jump in and furnish a lot of financial support to a lot of private businesses, nothing will be developed in the designated area. Looking at the realities of Payson -- there don't seem to be very many other areas for anyone to go to start a business.

The town's proposed quid pro quo to the property tax recipients, who "do without" for 20 years, is that at the end of 20 years these government entities, who should have received 95.4 percent of the tax stream, will then receive a great bonus. This great bonus is the large amount of property tax that will come from all the new construction that was made possible, solely by the town plowing the interim tax receipts into the infrastructure of the designated area.

This, in itself, is a stretch of reality and common sense. Perhaps even worse is the fact that, if true, it ignores the "present value of money."

For instance, as I calculate it, $1,000 paid 20 years from now is worth about $125 today. On this rationale, unless the property in the designated area is worth eight times as much as it would have been without the town's spending on infrastructure, the town has wasted our money, no matter how they raised it.

I urge that anyone who agrees with the above analysis call individual council members and tell them so.

Also, please call Sen. Jack Brown and Representatives Debra Brimhall and Jake Flake, and ask them to support changes in the state laws to prevent one government entity giving away the tax revenue of another government entity, without the second entity's permission.

Dan Adams
Payson

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