On Wednesday, October 5, the community in the Kanab area got the chance to meet the candidates for Kane County Commission and the school district. The general meeting summary by Neal Brown can be found beginning on the front page, but one question was submitted by the community frequently enough to have time dedicated specifically to it at the forum: What are these reports of $97 million going to private developers out at East Zion? The article that follows is a result of weeks of research and interviewing with county officials, developers and engineers, as well as locals in the East Zion area with an opinion on the topic.
First and foremost: according to verifiable sources, Kane County taxpayer money is not going to private developers in East Zion. According to sources within the county such as Commissioner Brent Chamberlain and Clerk/Auditor Karla Johnson, there are some taxes being used for municipal services in the area, but those taxes are allotted to the East Zion special service district, and therefore are specifically drawn from taxes paid by those within the SSD’s borders.
So where is this $97 million figure coming from? The money in question is a result of a development strategy called Tax Increment Financing (TIF). To reference a previous SUN article on the subject: TIF, in short, is tax money a new development generates over the duration of the TIF agreement; 20 years in the case of East Zion. A TIF functions by fixing the value of the tax at a baseline, meaning the area’s taxes will be fixed at the amount they’d be without the project being developed. The governing body will keep gaining the taxes at the rate they were before the project, and the taxes the project would be generating would be funneled back into the development of the area and reimbursing the private entities that fronted the costs for the initial investment in the project. Once the 20-year duration is concluded, all tax revenue for the area will once again start going directly to county coffers to fund school district and other service costs just like any other taxes.
The system functions on the old premise that ‘a rising tide lifts all ships.’ If successful, does it subsidize a major source of revenue for private investors? Unambiguously yes. If successful, does it provide a major source of tax revenue for the county without putting that tax burden on the county’s general citizenry? Also, yes - that’s the point of the system. County Clerk/Auditor Karla Johnson put it this way: “The goal is to have enough business growth that it lightens the tax burden overall - like for citizens, private homes. We’ll make way more in taxes than we would without the TIF.” The county publication describes it as a “win-win.” Commissioner Brent Chamberlain insists it will have minimal to no impact on the taxation of the citizens of Kane County.
The $97 million is money that does not yet exist. It is twenty years’ worth of increase in taxes that the East Zion project and its resultant business are projected to generate - the TIF pays that money back. According to Utah State resources, a TIF can only progress if it passes the “but-for” test in a reasonable manner; that is, could the development project be completed without the easement of taxes granted by the TIF? If yes, the TIF cannot be approved by state statute. This means that the assessors and auditors - both on the public and private sector’s respective sides - hashing out the finances of the project determined that without this tax return, the project could not happen.
Proponents of the project cite its potential to bring dramatically increased revenue to the county and employment opportunities for the communities in the area. Clerk/Auditor Johnson states, “We’ll make way more over those twenty years than we would without the TIF … All that development, that’s a chance for local kids to make a living, to come home. All this big population growth … we want local kids to be able to come home and be a part of it.” Incumbent Commissioner and write-in commission candidate Andy Gant said of the project, “If you do not live within the proposed development area, this does not affect your taxes. None. Zero … This is an enormous source of revenue for the county … and the people who live within the proposed development area have voted 90 percent in favor of the project.”
City Council member and candidate for the Commission Celeste Meyeres said of the project, “I am in favor of this project and other projects like that, because it is locally driven. The area that’s impacted gets to decide whether or not they have that project happen.” Of accusations that the county is taxing its general citizenry and giving money directly to private developers, Gant said “this is the biggest lie shared in Kane County in the thirty years that I’ve lived here.” Director of the Kane County Office of Tourism and write-in commission candidate Camille Johnson called this statement “A crock of crap. There is no money going to rich developers … it’s mind-blowing that people aren’t saying this is the most visionary project seen in the area.”
Opposition to the project, however, states that these taxes are fairly paid by other developers, and that the county is subsidizing what it doesn’t need to - essentially opposing the veracity of the “but-for” test and the claims that this will have minimal impact on the taxpayers. Candidate for the commission Pat Horning stated, “We need to take care of what we already have now, instead of building new things we can’t even take care of. If someone comes into Kanab and wants to build a bookstore, are we going to give them money for the shelves? No … when the county decides to forego receiving almost one hundred million dollars of taxes over 20 years, this will certainly impact the county budget and the taxpayers of our county.”
Commission Candidate Patty Kubeja, who has been an outspoken opponent of the project, chose to be absent from Wednesday’s forum, stating on her social media page, “after seeing my opponent, Andy Gant, whom I have already debated multiple times since March and whom I defeated in the June Primary, promote on his new campaign website the fact that his own company is sponsoring tonight’s ‘Candidate Forum’, and the fact that I will be the only candidate on the November ballot for Seat A, I will not be attending tonight’s (October 5, 2022) Candidate Forum.”
In an interview with one of the developers of the East Zion project, a question was posed “They say that the money is being taken away from the Kane County communities and given to mysterious private developers… we live here! We live in East Zion! We’re employing people from East Zion and all over Kane County, we’re paying all our due taxes right now … all we ask is that the money we’re raising in East Zion stay in East Zion, instead of going to big government projects halfway across the county. They say we’re taking away from Kane County’s communities… well if we aren’t your community, who is? It’s not called Kanab County … we’ll keep paying our taxes just as we are now. We’ve generated quite a bit for the county already, and this project can be a multi-million-dollar cash cow for the county in the future.” The same developer referenced a statement made by Clerk/Auditor Johnson - “Their tax revenues have plateaued. They’re stagnating. They need a jumpstart.” - when he said, “The area here is underdeveloped. It’s incredibly productive, and could be a genuine positive influence for the good of this county.”
The previous are statements offered by officials and potential officials in the know on the issue. What follows will be the simple facts as they were presented, and sources to contact so anyone interested can check the information themselves.
The TIF is designed to have minimal impact on the taxpayer - it is designed so that the tax being generated by an area will continue to be generated by that area, and that any impact is isolated to the boundaries of the area of the project.
The duration of this TIF is twenty years, after which the completed East Zion project will begin contributing its full value to the county in taxes. During that period, the area will pay taxes as though the project were not happening, and the project’s taxes will be reinvested in the development of the area. Projections for what these taxes are worth can be found on the county’s website - this projected reinvested value is what has come colloquially to be known as $97 million.
Portions of the TIF have been reserved, by state statute, for causes such as housing, hospital and school district funds - those causes will benefit from the TIF and be granted a portion of TIF funds.
This information is sourced from the state government’s website - Utah.Gov - and the county’s website - Kane. utah.gov. Commissioners Chamberlain, Heaton and Gant have all stated their willingness to discuss these issues with members of the public, as have Pat Horning, Camille Johnson-Taylor, Karla Johnson, and Celeste Meyeres.
Additionally, if any readers wish for further sourcing or elaboration on this information, email tygant@sunews.net.
