RDAs often are created in undeveloped or blighted areas that generate few property-tax dollars. Under current law, cities, which oversee redevelopment agencies, can tap the incremental increase in tax value for up to 20 years to help a developer cover project costs or pay for such things as roads and sewer lines. The taxing agencies still receive the base property tax revenue but give up the additional revenue generated by improvements to the property with the promise of receiving much higher amounts in the future. Sometimes school districts are paid a portion of the increase in tax value as a mitigation fee. Since passage of the law authorizing RDAs about 30 years ago, no one can recall a project that has come to an end and delivered those much-touted higher returns.
School districts fork over about half that amount.
But other taxing agencies, like water and sewer districts, promise a fight on Capitol Hill. If Stephenson's bill passes, the subsidy given to RDAs will have to shrink, or the project length be extended. And city officials say the loss of the districts' share of tax money will make it impossible to fund future RDAs. School districts don't lose anything. They don't lose a dime.