If the city of Ashland adopted urban renewal districts in an effort to boost economic growth, the districts would divert money not only from city coffers, but also from Jackson County and a state pool that funds local education.

If the city of Ashland adopted urban renewal districts in an effort to boost economic growth, the districts would divert money not only from city coffers, but also from Jackson County and a state pool that funds local education.

It also could divert money from the Youth Activities and Academics Levy that supplements the Ashland School District's budget.

During the time that an urban renewal district is in effect — typically 20 to 25 years — property tax gains inside the district would be used to pay for improvements there, rather than going into government coffers.

The city of Ashland, Jackson County and the state would receive less property tax revenue than they otherwise would off the property, city officials said.

City Administrator Martha Bennett said she thinks an urban renewal district would also divert property tax gains from the Youth Activities and Academics Levy.

To be sure, city officials will ask a consultant who will prepare an urban renewal financial feasibility study for the city to address that issue, Bennett said.

Passed by Ashland voters, the Youth Activities and Academics Levy provides money for extracurricular and academic activities.

There's no question that an urban renewal district would divert some Ashland property taxes from state and county coffers.

The state of Oregon manages the State School Fund for all public kindergarten-through-12th-grade schools. It allocates money to school districts on a per-pupil basis, rather than by the amount of property taxes collected in individual districts, according to a staff report to the City Council.

The diversion of property taxes to urban renewal in Ashland would have a slight effect on statewide funds, but the Ashland School District's annual budget would not be directly impacted, the staff report said.

If cities in Oregon adopted urban renewal districts to a great degree, state funding could be impacted, said Dan Thorndike, a former Ashland School District board member and former Medford Urban Renewal Agency board member.

State law puts limits on the amount of land that can be set aside in urban renewal districts. For example, cities such as Ashland with a population of less than 50,000 people can put no more than 25 percent of their land in urban renewal districts, according to the staff report to the council.

The city is required to consult with other taxing districts before adopting urban renewal districts, but it does not have to get their approval, according to staff members.

If an urban renewal district works as it's intended to do and spurs development of an area, all government entities will eventually receive higher property tax revenues when the district expires than they would if urban renewal improvements had not been made, Thorndike said.

"When it drops back in, it has far greater value," he said of the property inside an urban renewal district.

Staff writer Vickie Aldous can be reached at 541-479-8199 or vlaldous@yahoo.com.