A conservative think tank, a Clark County commissioner and a labor union agree on one thing: There are better ways to spend tax money during a recession than on redevelopment.
Commissioner Chris Giunchigliani wants to suspend the county’s 5-year-old redevelopment program so its $11 million in yearly tax money can be re-directed to schools, police and other services.
Despite the county’s efforts to woo developers, none has forged ahead in building within the three redevelopment zones in the east Las Vegas Valley, said Giunchigliani, blaming the weak market.
“The economy is bad,” she said. “It’s more prudent to put taxes into services where it’s most needed.”
She asked staff to report back to her but gave no deadline.
Commissioner Lawrence Weekly said he would support erasing the redevelopment agency if some of the tax money went to schools. Redevelopment programs aim to enhance blighted areas, which often are laden with rundown buildings and high crime.
Redevelopment agencies can be found in various forms across the country. Although they’ve succeeded in some areas, they’ve drawn criticism in other areas for taking money from public services.
The county designated two redevelopment areas on East Sahara Avenue and one at Twain Avenue and Maryland Parkway.
After a redevelopment zone is created, any increase in property tax revenue within that area is put into a fund to pay for improvements or foster business growth. This method is known as tax increments. The county has amassed $35 million in its fund.
Under Giunchigliani’s proposal, that money would remain available for new construction, design work or for the county to buy parcels. The fund, unlike the city of Las Vegas’ fund, can’t be used to spruce up existing structures.
If the program is suspended, the county could revisit it in a couple of years when the economy improves and then decide whether to unfreeze it, she said. Yet even if the other commissioners back Giunchigliani’s idea, it could face another hurdle: Will state law allow the program’s funding mechanism to be put on hold?
Statutes offer guidance for setting up a program but none for suspending or closing one, said Jeff Wells, assistant county manager.
State lawmakers might have to authorize the county cutting off the program’s tax money, and perhaps even change the statutes, Wells said. “As far as we know, it has not been done before in Nevada,” he said.
If the yearly $11 million is pulled from the program, about $4.2 million would go to the state for schools, county officials said. Also, $5.1 million would be dispensed to the county, $870,000 to the state, $410,000 to police and $417,000 to libraries.
These types of numbers show the extent that redevelopment agencies siphon tax dollars from schools and vital services, said Geoffrey Lawrence, an analyst for the Nevada Policy Research Institute, the think tank.
Lawrence agreed with Giunchigliani’s suggestion to re-direct funds from the county’s program. He recently released a report that criticized using tax money to boost redevelopment. The city of Anaheim, Calif., lured developers downtown by relaxing regulations and removing zoning hurdles, not by dangling a tax carrot, Lawrence said.
Culinary Local 226 has blasted the city of Las Vegas for its redevelopment program. A union representative said she agreed with the conservative institute’s findings and with Giunchigliani’s attempt to regain the tax money.
“When you’re in an economic downturn and you’re contemplating layoffs … our critique is you should not be diverting tax funds,” Culinary spokeswoman Pilar Weiss said.
However, Giunchigliani expressed support for the county’s program, saying it has strong potential. The program is in its infancy and is stalling in a slow market, she said.
“When you look to redevelop an area, there should be incentives to help a developer get a project off the ground,” she said. “We’ve just got to recognize the economics.”
Contact reporter Scott Wyland at firstname.lastname@example.org or 702-455-4519.