There is one good reason that I see to oppose Governor Jerry Brown’s plan to eliminate redevelopment agencies, and that is growth on Davis’ periphery. Every year the City of Davis passes through a little over two million dollars from its redevelopment agency to the county, in order to get the county to agree not to develop on Davis’ periphery.
It is a tenuous deal, not only for the peril of the redevelopment agency itself, but also because for the county the allure of developing on Davis’ boundaries and keeping tax revenue from either residential or commercial interests may at some point overwhelm the $2 million that the city kicks in through its redevelopment.
She went on to argue, “As staff pointed out last night, the Redevelopment Agency has funded much of our infrastructure, such as widening the Richards interchange, the Pole Line overpass, the I-80 bike underpass, etc., and was instrumental in creating the economically successful downtown that we have today, including both the ability to provide loans and to undertake key improvements.”
“Those of us who have lived here during the last two decades will understand the significance of the transformation experienced by our downtown, as well as the mitigation of the isolation that South Davis residents experienced before the infrastructure improvements were in place,” she concludes.
If we were just looking at this from a Davis-centered view of the world, there would be good reasons to keep redevelopment. However, I will argue that we can prevent development on our borders in other ways. And while we have benefited locally from redevelopment funded projects, overall it has not been a good thing for education, for blight or for California.
According to a recent article from the Sacramento Bee, “There are about 400 redevelopment agencies statewide. Their mission is revitalizing areas that local governments designate as blighted. Their primary tool: a funding system called tax increment financing.”
The Bee also gives a good explanation as to how the process works. When an area is designated as “blighted” and an RDA is formed, the property tax base is frozen. Over time, as the value of property rises, in part perhaps because of redevelopment efforts, but mainly because land had been dramatically appreciating in value until the last few years, the amount of money that local governments and schools can collect is frozen at the original land value and tax rate.
The RDA then pockets whatever increases there are to tax revenues, less a percentage that can get passed through to local governments and schools. Our own pass-through agreement works on this principle, siphoning off money to the county in an agreement that precludes them from developing on the city’s periphery.
If RDA’s were abolished as Governor Brown proposes, that money could go directly to cities, counties, and schools and help restore revenues depleted by budget cuts in the last four years.
So Sue Greenwald is absolutely correct, we get about twice the amount of money through redevelopment that we would without. However, that money comes at the expense of our general fund money, and also at the expense of schools and counties.
And, ironically, the money goes generally to line the pockets of developers.
We have avoided the fight between schools and redevelopment until now because the state is required to reimburse the school districts for funds that they lose due to redevelopment.
However, that is changing. The state has contributed roughly $1.8 billion a year to schools to reimburse for lost money due to redevelopment agencies. But because of budget crises at the state level, the state has had to cut billions from schools each year.
The other problem is that redevelopment is supposed to generate economic development and job growth by developing blighted areas, which eventually would lead to higher property taxes for local governments and more income taxes for the state.
The problem, as the California Budget Report indicates, is that the research indicates mixed results, at best.
“First, it’s unclear whether TIF [tax increment financing] boosts property values and results in increased property tax revenues,” they write.
“While the research finds mixed results, the most comprehensive independent study of California’s RDAs, conducted by the Public Policy Institute of California (PPIC), found that redevelopment activities in most RDAs studied failed to generate enough growth in property values to account for the tax increment revenues diverted to redevelopment,” they write.
The PPIC study concluded that “the existing tax increment system is not an effective way to finance redevelopment. Few projects generate enough increase in assessed value to account for their share of these revenues.”
Furthermore, they point out that research indicates that the these projects simply shift economic activity within municipalities rather than creating additional economic activity.
“For example,” they argue, “one study suggests that when employment increases in TIF (“tax-increment financing”) project areas, it decreases in other parts of the city, which could mean that TIF projects draw jobs from elsewhere in the city, rather than generating new jobs.”
The legislative analyst’s office similarly concluded, “There is no reliable evidence that redevelopment projects attract businesses to the state or increase overall economic development in California. The presence of a redevelopment area might shift development from one location to another, but does not significantly increase economic activity statewide.”
The biggest issue at the local level is of course the pass-through agreement which transfers money that would have gone to the redevelopment agency and instead gives it to the county. However, from the county’s perspective, they are losing a lot more than they gain from the diversion of tax money to redevelopment, than they get from subsequent diversion of tax money from redevelopment.
The fear is that without the pass-through agreement that the county would impose growth on Davis’ periphery as they threatened to do most recently in 2007.
However, I think those fears are overblown. The problem is that growth on Davis’ periphery is the third rail of Davis politics. Back in 2007, even the hint of studying that development brought objections not just from hundreds of Davis residents, but also from Davis’ politicians including the two who currently sit on the board of Supervisors Don Saylor and Jim Provenza.
So why would they touch the issue now? They probably will not.
However, there is no assurance that Davis will retain two Supervisors, once redistricting occurs within the next year.
Without the pass-through agreement, however, it seems much more likely that there would be further measures such a county-wide Measure J.
Bottom line is that I think we will find a way to avoid the county building on our borders even without a pass-through agreement. It may take more work, but it will happen.
And unfortunately, given the scenario in the rest of the state, growth on our border just is not enough of a reason to continue to siphon billions from education and the counties that will end up in the pockets of developers.
In the meantime, Davis has moved to do what all other local cities are doing, which is spend the money before the state can take it away.
At last week’s council meeting, city staff was directed to prioritize redevelopment by taking out bonding documents – at full capacity – which the agency will review within the next couple of weeks.
I will not argue that Davis does not have worthy projects, but given that redevelopment was supposed to redevelop blighted areas, Davis really should not qualify anyway. This amounts to a money grab by Davis and other prosperous areas for purposes not foreseen or intended under redevelopment law.
There is nothing illegal about this, it is just not the way things were intended. In good times, we could live with that. But when county services are being cut the bone and schools are facing statewide another $9 billion cut should a tax extension not be approved by the voters, then we need to re-think our priorities.
—David M. Greenwald reporting
RDAs are very much a mixed bag. Many have been used to subsidize developers, even for big box stores such as Home Depot.
WE may have used our RDA funds wisely in the past. Sue would certainly know more than I would. But statewide its a mess. Some areas are indeed blighted but even then its not clear that RDAs reduce blight. For example in Clearlake, CA, the RDA proposed using RDA funds to support a large shopping center outside the downtown which would have hurt smaller local stores and almost certainly increased downtown blight (which is a serious issue in Clearlake).
In Davis the City voted to use RDA funds to support a Hanlees Volkswagen dealership in the “blighted” area around Chiles road.
The state is broke. Schools and universities are being cut back severely.
Totally agree with especially last 2 paragraphs. It was distasteful the way the Council (and then the School Board at the insistsnce of Gina) grabbed at the chance to spend it all and now. Forget the county services and the rest of CA. ME ME ME mentality by all of them.
dmg: “There is one good reason that I see to oppose Governor Jerry Brown’s plan to eliminate redevelopment agencies, and that is growth on Davis’ periphery.”
Playing devil’s advocate to Jerry Brown’s proposal to eliminate RDAs and allegedly give the money back to schools and cities, my question is this: How much of the RDA money will actually be returned locally and to the schools? And how much will be retained to fix the state’s problems? In other words how much of the RDA funding will actually trickle down to the local level for schools, counties and cities. My guess is not enough. I read somewhere (and unfortunately I cannot even remember where I read it) that for every $10 million in RDA funding, only about $2 million would be returned by the state to the cities. If that is true, that is only 20% and blatantly unacceptable…
dmg: “There is another good reason as Councilmember Sue Greenwald wrote on the Enterprise website last week, “Under the Redevelopment Agency, we would retain over twice the property tax than we would without it.”
So the unintended consequence of doing away w RDAs is the city loses half its property tax revenue… not so nice…
dmg: “She went on to argue, “As staff pointed out last night, the Redevelopment Agency has funded much of our infrastructure, such as widening the Richards interchange, the Pole Line overpass, the I-80 bike underpass, etc., and was instrumental in creating the economically successful downtown that we have today, including both the ability to provide loans and to undertake key improvements.””
I watched city staff’s presentation about the improvements our RDA has had on the city of Davis. The transformation has been remarkable. The lovely bricklined park by Baskin-Robbins downtown – RDA project. Many of the nicer facades to make downtown look more cohesive – RDA project. Many of the new buildings downtown – RDA project. Train depot building – RDA project. Bistro 33 – RDA project. Former teen center now Bicycle Museum – RDA project. Farmers Market – RDA project. And the list goes on. Had we not had an RDA agency, it is likely that none of those projects would have been possible…
dmg: “Furthermore, they point out that research indicates that the these projects simply shift economic activity within municipalities rather than creating additional economic activity.”
I think it depends on how it is done. In the case of Davis, I think our RDA has done well, and made the downtown more vibrant and successful. I don’t see any evidence that the RDA projects have shifted economic activity from one part of the city to the other. However, in the case of Woodland, I think their redevelopment has done just that. The downtown is having real problems, while the jobs and business has moved to other outlying parts of the city.
dmg: “In the meantime, Davis has moved to do what all other local cities are doing, which is spend the money before the state can take it away.”
It is either use it or lose it. I’m all for using it – it is our property that was taxed… why should we not keep money locally that is ours?
dmg: “However, there is no assurance that Davis will retain two Supervisors, once redistricting occurs within the next year.”
That’s right, we cannot be sure what will happen in the future…
Bottom line is I think the issue of doing away w RDAs has to be thought through very carefully. To just agree lockstep w Brown w/o thinking through the consequences of this decision or demanding that all RDA funding be returned locally is a foolish exercise that will just end up biting us in the backside somewhere down the road…
“How much of the RDA money will actually be returned locally and to the schools? And how much will be retained to fix the state’s problems? In other words how much of the RDA funding will actually trickle down to the local level for schools, counties and cities. “
You’re asking entirely the wrong question. Right now, money is being taken by the state from schools and counties and to a lesser extent cities. If this gives the state more resources, it means they have to take less away. It’s not that right now schools and counties would get more, it’s that they would lose less.
“So the unintended consequence of doing away w RDAs is the city loses half its property tax revenue… not so nice…”
Where do you get that figure? Right now the redevelopment agency gets property taxes on 29% of the city’s area. Removing the agency means that the city would get general fund money that it is not getting now from 29% of its area.
Those are all excellent examples of how RDA funding is being misused. You can’t seriously argue that any of those areas constituted blight unless you stretch the definition to the point of being meaningless.
How much RDA funding has been used to improve east Davis in any way? How about the shopping center in Oeste Manor? Or the strip mall at 5th and L? Or some improvements in the lower-end housing nearby?
RDA funding is used to make downtowns prettier, which hardly seems like a good use for money that could be redirected to road maintenance, parks, street tree management, school facilities, and other expenses that citizens would probably hold as higher priorities than brick facades.
The problem is that RDA funds are constrained, whereas if the funds went into the General Fund they could be applied to unmet needs.
The benefits of RDA funding are dwindling due to the collapse of property values. The drawbacks are going to become apparent as fancy projects continue to be built while parks go dry and greenbelts get weedy. This is akin to building a fancy new stadium while teachers are being laid off. It is a misuse of resources.
If you want to get up to speed on RDAs and Gov. Brown’s proposal, you should read this brief analysis of the topic from the Legislative Analysts Office ([url]http://www.lao.ca.gov/handouts/state_admin/2011/Gov_Redevelopment_2_3_11.pdf[/url]).
Elaine asks a laundry list of questions above. If you read the LAO report you will find all those answers (as best we can know them at this point).
Because cities like Davis have become addicted to (or in more neutral terms “used to”) having RDA money, I can understand the reluctance of giving them up. However, I don’t think from a “good governance” perspective RDAs make sense. They essentially take away general use funds and move them into a bucket which becomes “high priority” funds when very often it is unclear why that sort of spending deserves any legislative priority at all other than the fact that we shove all that money into that priority bucket.
I don’t think the view of “RDA money is subsidizing evil corporations and fat-cat developers and other people we hate” is compelling, but I have no doubt it goes on. Nor do I think the notion that ending the RDAs will feed more tax money into the public schools is all that compelling, mostly because K-12 education already grabs such a large share of tax money in our state.
What I do find attractive about the notion of getting rid of the RDAs is that doing so makes public financing clearer and probably more accountable and certainly more flexible. It gets rid of the argument: “It’s okay that we are wasting money on this project. We couldn’t use it to pay for police services or parks maintenance anyhow. This RDA money is in a different pot.” And for me–and I suspect most voters–it was (until recently) very unclear why this money was in a different pot and why when I pay property taxes the money goes in one pot but when a Mace Ranch or S. Davis resident pays property taxes it goes in a second pot.
I find it hard to understand why “redevelopment” needs its own fixed source of untouchable money. If we have blight in Davis or in Yolo County or elsewhere in the state, then it would make more sense to me that the Council or Board of Supes or whatever responsible legislative body should appropriate funds based on need. But if money is short, then they might prioritize other things. To my mind, allowing flexibility allows for accountability.
THe term “blight” is used quite liberally in RDAs, especially older ones. Davis is a good example since we don’t have much blight. Its not clear to me at all that cities who do have blight have spent RDA money wisely (see my Clearlake example above–its not atypical).
[quote]You’re asking entirely the wrong question. Right now, money is being taken by the state from schools and counties and to a lesser extent cities. If this gives the state more resources, it means they have to take less away. It’s not that right now schools and counties would get more, it’s that they would lose less.[/quote]
I generally agree with David on this.
[quote]I don’t think the view of “RDA money is subsidizing evil corporations and fat-cat developers and other people we hate” is compelling, but I have no doubt it goes on. Nor do I think the notion that ending the RDAs will feed more tax money into the public schools is all that compelling, mostly because K-12 education already grabs such a large share of tax money in our state. [/quote]
Rich: You are splitting hairs. Your main argument is that redevelopment should have to compete with other priorities. I agree 100%, but then you say you don’t agree with David’s analogy or with those who are against fat-cat developers. But to me its all the same argument. Taxpayers overwhelmingly say that schools should be the one of the top priorities, but we are cutting back because the state is broke. RDAs and other non-general fund revenue sources circumvent this process and allow lower priority projects to prevail over higher priority projects–and schools are the highest priority for many. If RDA money is available to the state I think it ultimately will help schools though the linkage may be indirect.
Jerry Brown got this right.
[i]” I agree 100%, but then you say you don’t agree with David’s analogy or with those who are against fat-cat developers.”[/i]
All I meant to say is that I am not sold on an argument which is made as an appeal to prejudice.
If anyone is interested in a good overview of the Davis RDA, take a look at this 35-page document outlining the Davis RDA from 2008-2013 ([url]http://cityofdavis.org/meetings/councilpackets/20090210/02-RDA 5-Year Implementation Plan.pdf[/url]). It shows all of the projects our RDA is funding, has funded or will fund.
One thing to note about the RDA: a lot of its money goes into low-income housing projects, which, of course, are designed to enrich the middlemen who build them and manage them. DACHA, for example, got $4,153,428 in RDA money. That amounts to a subsidy of $207,671.40 per house!!! (Note: I would have much prefered the members of the City Council just give that cash away to random people who look like they are poor than spend it on a small number of household while lining the pockets of middlemen who set up the whole system to benefit themselves.)
Another thing about the Davis RDA: I think many of the public infrastructure projects that our agency spent money on–maybe not the bulb outs–are defensible. My greater complaint is that in a world of limited resources for priority spending, I don’t like the notion of restricting our options by forcing the money out of the general fund.
Here are the projects listed by the RDA (some for the future):
• H Street alley realignment
• Third Street Corridor intersection improvements
• Improvements to Historic City Hall to convert building and grounds into Bistro 33 restaurant
• Funded acquisition of the Varsity Theater and processed second screen addition
• Pedestrian improvements for Second Street
• Third Street Corridor intersection improvements (C to G Streets)
• B and 3rd Streets Visioning Process
• Continued analysis of location, design, and funding for a third downtown parking structure
• Initiated reuse evaluation of Hunt Boyer Mansion and Third and B properties
• Completed EIR, negotiated ground lease for new mixed-use building on Hunt Boyer Tank House site.
• Assisted in survey of downtown parking supply and development of proposal for initial trial of paid parking in E Street parking lot.
• In collaboration with The Capital Corridor, study opportunities for improved access to Downtown and the train Depot, including additional parking, commuter shuttles, carpool programs, etc.
• Complete reuse analysis of 3rd & B and the Hunt Boyer Mansion properties for private use
• Complete reconstruction of the Tank House
• Analyze parking needs related to Richards Blvd, Multi-modal Center, Core Area and surrounding neighborhoods
• Rehabilitate parking structure at 1st & F
• Analyze improvements to Fifth Street.
• Improve traffic circulation at the I-80 off-ramps leading to downtown
• Improve primary corridors in the downtown to mitigate traffic speeds and improve pedestrian and bike safety, including 3rd Street, 2nd Street, and B Street
• Analyze circulation between UC Davis and downtown to better accommodate
pedestrians and bicyclists
• Initiate update to General Plan and Core Area Specific Plan
• Evaluate Re-use options of the Pacific, Gas & Electric corporation yard
• Pursue the development of a Bicycle Museum
• Maintain and improve landscaping, hardscape, street furniture, and lighting improvements to alley ways and other public spaces in the Core Area
• In conjunction with the City of Davis, research acquisition and/or physical improvements of the University-owned property at First and F Streets
• Continue to preserve historically significant structures
• Replace or reconstruct faulty or inadequate utilities that pose a threat to the health and safety of users or occupants, such as; water and sewer lines, streets, bike lanes and paths, sidewalks, parkways, and lighting in the public right-of-way
From http://cityofdavis.org/finance/StateControllerReport/
Blight Progress Report
Activities undertaken by the Redevelopment Agency of the City of Davis during FY 2009-10 to alleviate blight included:
• Entered into a ground lease for 233-239 J Street. Solar Community Housing Association will provide permanently affordable housing in two vintage houses that have been relocated to the property.
• Secured funds and entered into a construction contract for aesthetic and storm sewer improvements on Second Street in downtown Davis.
• Received grant approval for the Fifth Street Corridor whole streets initiative.
• Processed a commercial rehabilitation loan application for an underutilized automobile dealership building.
Loan Report
The Redevelopment Agency did not determine that any loans exceeding $50,000 were defaulted or not in compliance with the terms of the agreements approved by the Agency.
Property Report
The Redevelopment Agency owns the following properties. None have been recently appraised and current market value is unknown. The Agency did not sell any property in 2009-10.
• Parking structure, First and F Streets. The Agency owns and maintains this public parking structure above the Holiday Cinema.
• 979 West Olive Drive. This parcel was acquired in preparation for the widening of Richards Boulevard, which was subsequently rejected by the voters. The property is currently used as a surface parking lot. Future uses have not been established.
• 1000 Richards Boulevard. This parcel was acquired as part of a package of land purchased from the Southern Pacific Railroad. Future uses have not been established.
• Historic City Hall. This property was transferred from the City to the Agency in FY 2005-06. It was rehabilitated and is currently leased to a restaurant operator.
• J Street parcels. These parcels were acquired with proceeds of the Low and Moderate Income Housing Fund in FY 2005-06. The Agency has entered into a land lease with Solar Community Housing Association for use as permanently affordable housing; construction began July 2010.
• 3rd and B. The Agency acquired the property at 303 Third Street from the City of Davis. It is leased to the US Bicycling Hall of Fame and operating as a museum.
• Hunt-Boyer Mansion, Tank House, and Mishka’s Café. The Agency acquired the properties at 604-610 Second Street from the City of Davis in December 2008. A portion of the property is ground-leased for a café/office building, now under construction. Future uses of the Hunt-Boyer Mansion and Tank House are undetermined.
Status of Capital and Housing Projects
• Fifth Street Corridor Improvement Project. The City has received a commitment of grant funding commitment from the SACOG Community Design program. The NEPA review is underway through Caltrans. Next steps are detailed design and engineering, and identification of before-and-after metrics for evaluating the performance of the project. Construction is anticipated summer 2012.
• Third Street Corridor Improvement Project. The City has received a commitment of grant funding from Caltrans for the public outreach and design. A Request for Proposals will be issued in fall 2010.
• B Street Corridor Improvement Project. Construction began July 2010 and is expected to be completed by November 2010. The project includes ARRA stimulus funds in addition to Redevelopment monies.
• New Harmony affordable housing development. The project has received planning approvals and a commitment of Redevelopment Agency funds. The property owner is seeking tax credits to provide the remainder of the funds required to begin construction.
• Solar Community Housing Association 3rd Street Project. Construction began July 2010, with the move of two vintage houses to the site. Rehabilitation and expansion are underway.
East Davis? North Davis? South Davis? West Davis? Nope.
You can find a map of the Davis RDA here ([url]http://2.bp.blogspot.com/_-iCrgpX1jNM/TVA9wN3fJoI/AAAAAAAAAc0/4heVMVAXytA/s1600/Davis+RDA+Map.bmp[/url]).
Don Shor: I am going to try to show an image of it below. However, if it screws up this page, please just junk this post. I apologize in advance if I screw up the page:
[img]http://2.bp.blogspot.com/_-iCrgpX1jNM/TVA9wN3fJoI/AAAAAAAAAc0/4heVMVAXytA/s1600/Davis+RDA+Map.bmp[/img]
Looks like it worked fine, Rich.
So to summarize: South Davis residents, and downtown residents and property owners, pay property taxes to fund projects that entirely occur in and benefit the downtown.
I don’t think that South Davis is, by any objective measure, more blighted than other parts of town. I think we have more blight in East Davis.
I don’t think the downtown is blighted at all, nor do any of the projects you or I listed have anything to do with that.
RDA’s have simply become an alternative funding mechanism, often for pet projects of various interest groups. They aren’t even separate from the city governance in most cases, since (as in the case of Davis) the board is often made up entirely and exclusively of the council members. But because of the funding separation, they create an artificial priority for projects that would otherwise not be ranked very high by most citizens. They disproportionately benefit downtown areas in ways that are often of dubious value, and provide no direct benefit to other parts of the city.
Don Shor: “So to summarize: South Davis residents, and downtown residents and property owners, pay property taxes to fund projects that entirely occur in and benefit the downtown.”
I understand your point. But the designated Redevelopment Area is essentially the downtown core or near the downtown core. The RDA funding has to be spent on projects where the city considers the blight to be, which is only w/n the designated Redevelopment Area. What I am not clear on is how the designated Redevelopment Area was decided on in the first place. Anyone know?
Don Shor: ” But because of the funding separation, they create an artificial priority for projects that would otherwise not be ranked very high by most citizens. They disproportionately benefit downtown areas in ways that are often of dubious value, and provide no direct benefit to other parts of the city.”
I think this is a valid point (and one I tend to personally agree with). However what we don’t know is how many people in Davis/state of CA agree/disagree w this point of view. I was suprised at how many put DHS stadium renovation above renovation of the MPR or Emerson – so there you go. One man’s “frill” is another man’s “blight”!
erm: “So the unintended consequence of doing away w RDAs is the city loses half its property tax revenue… not so nice…”
dmg: “Where do you get that figure? Right now the redevelopment agency gets property taxes on 29% of the city’s area. Removing the agency means that the city would get general fund money that it is not getting now from 29% of its area.”
My bad – let me reword what I meant to say: “Without the Redevelopment Agency, we would lose over twice the property tax than we would without it.”
Another niggling problem that is bothering me is this: If RDAs are done away w to free up more money for schools, what guarantee do w have that Davis will get its fair share of that former RDA funding? Who is to say that larger counties full of low income residents (like Los Angeles County) won’t get a greater share than a city like Davis – which will be deemed to be doing so much better than other school districts – so that Davis doesn’t need as much additional funding from the dissolution of the RDAs?
[quote]What I am not clear on is how the designated Redevelopment Area was decided on in the first place. Anyone know?
[/quote]
Elaine:
I have had a little experience here. Although there are formal definitions of what constitutes blight, in practice RDAs could declare blight in many cases such as Davis’ RDA where one would be hard pressed to find serious blight on the scale necessary for redevelopment. Also, once a district is declared an RDA it tends to stay that way.
Rifkin: “If you want to get up to speed on RDAs and Gov. Brown’s proposal, you should read this brief analysis of the topic from the Legislative Analysts Office.”
Sorry, but the LAO report reads like a political campaign add!
The complaint that “property tax revenues allocated to redevelopment varies significantly at the local level” could be cured by tightening up the restrictions for what is considered “blight”.
The complaint that “there is no reliable evidence that redevelopment projects …increase overall economic development in California” begs the question: Are there cities in CA who have used there RDA funding in a responsible way that has increased economic development? If yes, can that city’s model be used as an example in tweaking the regulations to be more functionally appropriate to achieve the desired goal of increasing economic development? After all, increasing economic development will ultimately increase tax revenue, so there will be more funding for our schools.
The complaint that “Redevelopment agencies receive approximately $5 billion of property tax revenue that would otherwise fund school districts, cities, counties and special districts…of this amount $300 million is passed through to schools…” raises the question: Why wasn’t it stated specifically how much redevelopment agencies receive that would otherwise go to fund school districts? Why not pass through a greater amount of RDA funding to schools rather than just abolish RDAs?
The complaint that “Voter approval of Proposition 22 in 2010 greatly constrains the legislature’s authority to enact future revenue shifts [requiring redevelopment agencies to give shares of the property tax increment to school districts]” is essentially an attempt to make an end run around what the voters clearly want – to keep property tax increment funds local.
This statement is curious: “The Governor’s proposal would dissolve existing redevelopment agencies by July 1. Local successor agencies would receive the property tax increment that currently goes to redevelopment agencies”. If all the RDA property tax increment goes to local successor agencies, exactly how does that help the state better fund its schools if it doesn’t keep any of the RDA money? I assume the state will lessen its contribution to its public schools, in favor of the local successor agencies forking over their property tax increment for its own schools. But doesn’t that scheme end up highly favoring those cities like Davis whose property values are much higher?
Another interesting development: “To give communities greater capacity to promote economic development in the absence of RDAs, the Governor proposes a constitutional amendment to allow local voters to approve tax increases and general obligation bonds for these purposes by a 55 percent majority.” Isn’t that essentially trying to change the current requirement that any increase in taxes must be approved by a 67% majority?
In the year 2010, Brown concedes the RDA funding passed on to local successor agencies will be used for not just funding our schools, but also for: paying RDA debts and obligations, MediCal costs, court costs, local agencies pursuant to pass-through agreements, cities, counties, special districts. In other words, if the RDA funding doesn’t cover ALL these expenses, then what? Is the idea that voters can tax themselves some more w only a 55% majority?
I’ll stop there. This raises more questions than it gives answers!
erm: “Another niggling problem that is bothering me is this: If RDAs are done away w to free up more money for schools, what guarantee do w have that Davis will get its fair share of that former RDA funding? Who is to say that larger counties full of low income residents (like Los Angeles County) won’t get a greater share than a city like Davis – which will be deemed to be doing so much better than other school districts – so that Davis doesn’t need as much additional funding from the dissolution of the RDAs?”
Actually I think it is going to work the other way around – those cities w higher property values will get more funding than those w lower property values…
Dr. Wu: “I have had a little experience here. Although there are formal definitions of what constitutes blight, in practice RDAs could declare blight in many cases such as Davis’ RDA where one would be hard pressed to find serious blight on the scale necessary for redevelopment. Also, once a district is declared an RDA it tends to stay that way.”
In thinking about this, I have the following questions and observations:
1) Who specifically decided on where the blighted areas would be in Davis? City Council? Commissions? City Staff? DDBA? Voters? All of them?
2) We in Davis may not have blight compared to some other city, but that point is essentially irrelevant, from what I can tell. We are using our property tax increment to improve the economy of our city.
3) Doesn’t the state make the regulations that determine what is designated “blight”? Cannot the state change those regulations to tighten them up so that less can be legally designated as “blight”?
4) If the local RDAs have not acted responsibly, what makes the Governor think the local successor agencies that replace the RDAs are going to be any more responsible?
[quote]The complaint that “there is no reliable evidence that redevelopment projects …increase overall economic development in California” begs the question: Are there cities in CA who have used there RDA funding in a responsible way that has increased economic development? If yes, can that city’s model be used as an example in tweaking the regulations to be more functionally appropriate to achieve the desired goal of increasing economic development? After all, increasing economic development will ultimately increase tax revenue, so there will be more funding for our schools. [/quote]
Even if we assume that Davis has used its RDA funds well (and I think there are a number of people on this blog who will debate that) the designation is a statewide issue. I can assure you there are many cities that have not used the money well. So, since this is a state concern I think its relevant to look at the performance of RDAs as a whole.
The issue of who gets what in the end is a different issue. My own view, which I have expressed elsewhere on the Vanguard, is that the mechanisms created in the 1970s–the Serrano decision, and even to an extent Prop 13, are being unwound and we will eventually (may take a decade) see a return to the old days when wealthier cities and districts (thats us) will do better to the extent that locals are willing to tax themselves. (This is already the case of course but it will be more dramatic in ten years.)
In terms of redistribution, to me the more interesting question is will the State bail out LA or another large city if and when they are faced with chapter 9 (default)?
In the end I’d much rather be Davis than most cities in the central valley.
I think the Gov saw lots of redevelopment waste in Oakland and figured it was best to do away with it and help deal with the budget until things improve enough to try to come up with a better way. As for growth on the periphery I think that would be good. Now Davis could annex and grow its tax base or do nothing and let the County do it but if ending redevelopment helps end the overpricing of housing in Davis that would be a good thing.
While we are at it the Bee had a piece today about getting rid of the Williamson Act and how that hurts Yolo County. Its a bad environmental idea but a good fiscal idea because it would take away a tax break from some of the most anti-tax interests in the state exemplified by the Farm Bureau. Maybe someone should ask Assemblyman Nielsen if losing the Williamson Act is worth blocking a vote on Brown’s special election.
“Another niggling problem that is bothering me is this: If RDAs are done away w to free up more money for schools, what guarantee do w have that Davis will get its fair share of that former RDA funding?”
I didn’t see any one answer this question, if they did forgive me, if the RDA went away, then the taxes from properties formerly in the RDA zone would revert to the way they work in any other part of town.
[quote]Without the pass-through agreement, however, it seems much more likely that there would be further measures such a county-wide Measure J.–David Greenwald[/quote]I do not believe a county-wide Measure J type initiative would be easy to pass. We would have to reach all the voters of the county, and the developers would be spend massive amounts of money on the campaign. They could pit Davis against the rest of the county, arguing that development along I-80 would benefit those in the county who don’t live in Davis, pitting Davis against the rest of the county.
I think that David Greenwald is vastly understating the danger to good planning in the region and in Davis that would result from an end to our pass-through agreement.
dmg: “I didn’t see any one answer this question, if they did forgive me, if the RDA went away, then the taxes from properties formerly in the RDA zone would revert to the way they work in any other part of town.”
Actually I answered my own question, and you’ve confirmed my reconsideration. I think it is going to work the other way around – the wealthier area schools will do far better than those schools in the poorer districts w lower property values.
Dr. Wu: “Even if we assume that Davis has used its RDA funds well (and I think there are a number of people on this blog who will debate that) the designation is a statewide issue. I can assure you there are many cities that have not used the money well. So, since this is a state concern I think its relevant to look at the performance of RDAs as a whole.”
But cannot the state change its def’n of what constitutes true “blight” so that the system cannot be gamed so much? Wouldn’t that be a less drastic solution? I’m really not sure how I feel about RDAs…I can see good reasons to do away w them…but it is not clear to me what the full implications of such a drastic decision will be. Brown is putting a lot of political spin on this, but as I said, much of his rhetoric leaves me w more questions than answers…
Dr Wu: “In terms of redistribution, to me the more interesting question is will the State bail out LA or another large city if and when they are faced with chapter 9 (default)?”
Now there is an interesting question…
I do think that redevelopment agencies could use reform and tighter rules. For example, Davis would not feel the need to subsidize Hanlee’s if other cities were not providing subsidies to lure an increasingly limited number of auto dealerships. It would make a lot of sense to ban the use of ALL RDA subsidies to auto dealerships. The use of RDA funds could use tighter rules.
That said, Redevelopment Agencies are one of the few effective ways that we can guarantee investment of public funds in infrastructure.
If you visit Asian cities, you will see how far we are falling behind in infrastructure. The Asian countries are investing in future, and they will reap enormous benefits.
Redevelopment Agencies are among the few mechanisms for assuring that some local tax dollars are spent on infrastructure improvements. Without the Redevelopment Agencies, I fear that our entire budget will be spent on salaries and benefits of existing workers.
We collect an enormous amount of tax dollars. A small fraction of it should be set aside for public improvements; for building great cities and towns of the future.
“Actually I answered my own question, and you’ve confirmed my reconsideration. I think it is going to work the other way around – the wealthier area schools will do far better than those schools in the poorer districts w lower property values.”
Due to proposition 13, that’s not how property taxes get allocated. They don’t stay local for schools, instead they go to the state and get redistributed. There are a few exceptions to this.
First, is the parcel tax which we know about.
Second, is the basic aid district which brings in enough money locally to support the schools and therefore only gets a basic level of aid from the state.
Third are bond measures, but those only go to facilities.
Otherwise every non-basic aid school in the state gets the same per pupil. Could RDA money going back to the schools push more districts into the basic aid category. I don’t know enough about school financing to tell you, but it is possible.
[quote]Now Davis could annex and grow its tax base–Toad[/quote]”Growing our tax base” is a meaningless term. What we need to make is more net revenue. Since most new development costs more to service than it brings in revenue, annexation is unlikely to bring net revenue.
If you pause to think for a moment, you recognize that cities with tons of economic development and very large “tax bases” are actually in more fiscal trouble than we are.
Since the elimination of the equipment tax for high tech industry, I doubt that even a high tech business park will bring significant new net revenue.
Hotels and auto sales remain the major sources of significant net revenue. Retail contributes, but bringing retail sales up to the average freeway mall city level would only save taxpayers a few dollars each a year–not even noticeable compared to the projected deficits and our total supplementary taxes and fee increases.
Growth and annexation will not improve the city’s fiscal situation.
[quote]That said, Redevelopment Agencies are one of the few effective ways that we can guarantee investment of public funds in infrastructure. [/quote]
Sue–you make a good point. I do think RDAs are flawed to the point where its time to reinvent the wheel. RDAs limit infrastructure spending to within their limits though the definition has been applied so broadly that may not be as limiting as it could be. But RDAs only help for some infrastructure spending.
On salaries though I agree 100%. At the local level salaries eat up far too much of our budget and entitlements (pensions, medical benefits and at the federal level Social Security) eat up much of government budgets.
We don’t make anything. We don’t support infrastructure. We wonder why we are falling behind.
[i]”Since [b]the elimination of the equipment tax for high tech industry[/b], I doubt that even a high tech business park will bring significant new net revenue.”[/i]
Sue, I have looked up the property tax laws. Nothing in state law has changed with regard to the business equipment tax. Nothing.
However, last Spring, the state sales and use tax laws in SB71 were changed for “green techhologies.” ([url]http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb_0051-0100/sb_71_bill_20100322_amended_asm_v98.html[/url]) Perhaps you misunderstood SB 71. [quote]The law frees clean tech companies in California from paying [u]sales taxes on manufacturing equipment[/u] that they buy.[/quote] The businesses affected are “green tech*” not high tech. The sales tax break is designed “for projects to generate new and renewable energy sources, develop clean and efficient distributed generation, and demonstrate the economic feasibility of new technologies.”
*The law goes into specifics as to what is green tech:
“Renewable energy” means a device or technology that conserves or produces heat, processes heat, space heating, water heating, steam, space cooling, refrigeration, mechanical energy, electricity, or energy in any form convertible to these uses, that does not expend or use conventional energy fuels, and that uses any of the following electrical generation technologies:
(A) Biomass.
(B) Solar thermal.
(C) Photovoltaic.
(D) Wind.
(E) Geothermal.
“Alternative sources” means the application of cogeneration technology, as defined in Section 25134; the conservation of energy; or the use of solar, biomass, wind, geothermal, hydroelectricity under 30 megawatts, or any other source of energy, the efficient use of which will reduce the use of fossil and nuclear fuels.
“Advanced transportation technologies” means emerging commercially competitive transportation-related technologies identified by the authority as capable of creating long-term, high value-added jobs for Californians while enhancing the state’s commitment to energy conservation, pollution reduction, and transportation efficiency. Those technologies may include, but are not limited to, any of the following:
(1) Intelligent vehicle highway systems.
(2) Advanced telecommunications for transportation.
(3) Command, control, and communications for public transit vehicles and systems.
(4) Electric vehicles and ultralow-emission vehicles.
(5) High-speed rail and magnetic levitation passenger systems.
(6) Fuel cells.
Dr. Wu,
I agree, but I think that, as a state-wide policy, we should keep Redevelopment Agencies in place until a better mechanism is guaranteed, and that is not on the horizon. In fact, the current proposal is the “allow” cities to pass local bonds for infrastructure with a lower majority threshold. That won’t work. The temptation to kick the can down the road is just too great.
Rich Rifkin: I have been told that we will not receive equipment tax for Mori Seiki, and Mori Seiki is certainly not a “green” technology company.
Mori Seiki is the standard high-tech light industrial enterprise whose equipment valuation is almost as high as the property tax valuation. This is the type high-tech industry that used to bring substantial net revenue to cities, but apparently no longer does.
“Redevelopment Agencies are among the few mechanisms for assuring that some local tax dollars are spent on infrastructure improvements. Without the Redevelopment Agencies, I fear that our entire budget will be spent on salaries and benefits of existing workers.”
You’ve made some good points, but none of it deals with the inequities of how those funds are collected and dispersed. Unless the whole city is an RDA, and the “blighted” parts of the whole city are funded proportionately to their need, the process still simply provides funding for special downtown projects.
For the 30 years I’ve been on Fifth Street there have been two blighted shopping areas within a few blocks. None gets funding, none gets attention. These serve the lowest-income residents of Davis.
[i]”Mori Seiki is the standard high-tech light industrial enterprise whose equipment valuation is almost as high as the property tax valuation. This is the type high-tech industry that used to bring substantial net revenue to cities, but apparently no longer does.”[/i]
I don’t know who told you that. It’s certainly possible I am wrong. However, if you look up the state code for property tax ([url]http://www.boe.ca.gov/proptaxes/ptrules.htm[/url]), there have been no recent changes (since 2003) which affect the business equipment tax. The closest tax change I could find is SB 71, which is what I quoted above.
[quote]Due to proposition 13, that’s not how property taxes get allocated. They don’t stay local for schools, instead they go to the state and get redistributed. There are a few exceptions to this.[/quote]
David:
Do you think this will remain as the status quo?
I don’t.
My theory is that the state will starve local government and richer areas will supplement some or all of the revenue shortages (e.g., Palo Alto will be just fine, thank you).
WE have a prime example in Davis in the upcoming election for schools. I will bet you that 10 years from now richer cities/districts will grab a higher proportion of revenues that they do now, effectively reneging on Serrano (which I consider the key decision) and to a lesser extent Prop 13.
WE will be even more a country of haves and have nots than we are now.
F Scott Fitzgerald would turn over in his grave. I am not advocating this change, but it is coming. Indeed these trends, in terms of the distribution of income, are well established since the 70s.
Like a frog in hot water, we just don’t see it.
I’d rather be rich (sorry if that isn’t progressive).
And I did not mean Rich Rifkin (no offense).
I think you are right Dr. Wu. I think that wealthy districts like Davis will find ways to spend money and the poor districts are going to be really hurting. That’s why we have a growing gap between rich and poor and why we have an achievement gap.
The DDBA will be hosting a community forum on this very question noon-1:00pm, Feb. 23, at the Odd Fellows Hall. I encourage all of the blog participants to attend.
David, “You’re asking entirely the wrong question.” Is the RDA a net benefit to the community? There is no doubt in my mind that the answer is yes. Come to the forum and let’s discuss.
The statements coming from the state are entirely self serving and silly. ALL governmental and private sector initiates would be cancelled immediately if waste or inefficiency occured somewhere in the program.
Don’s argument is also entirely beside the point. Insufficient investment is being made in East Davis, so we should stop investing in the redevelopment district? We should be investing in the redevelopment district AND elsewhere. Cancelling the investment mechanism for downtown and South Davis does not provide more investment funds for East Davis. The two shopping centers that Don refers to are unquestionably a community blight. Cancelling the RDA does nothing to remove the blight; it only adds more blight.
The RDA forces the politicians to consider making long term community investments. Without the RDA, revenue would simply disappear in the maw of daily governmental operations.
The RDA has absolutely improved our community and will continue doing so. Is the RDA perfect? No. Let us strive for perfection.
“And, ironically, the money goes generally to line the pockets of developers.” Foul, referee. Yellow card offense. David, you might want to consider retracting this statement about the Davis RDA.
“Is the RDA a net benefit to the community?”
I’m smart enough to recognize that such net benefit is a matter of perspective and priority.
“Yellow card offense. David, you might want to consider retracting this statement about the Davis RDA. “
If it makes you feel better, my comment was not meant to single out the Davis RDA.
[quote]You’ve made some good points, but none of it deals with the inequities of how those funds are collected and dispersed. — Don Shore[/quote]That is why I suggested reforming redevelopment agencies, rather than abolishing them. These issues could be addressed in RDA reform.
It is not that you are singling out the Davis RDA that I find objectionable. I cannot for the life of me figure out why you are lumping the Davis RDA in with those RDAs who have squandered their resources. Would you dissolve our school board because some other school boards in the state have done a poor job of managing their financial resources? I think not. And if we’re to dissolve a governmental entity for fiscal mismanagement, the first to go should be the State. That’s what’s so irritating about them spouting off about the RDAs. The last people that we should be taking direction from are the nitwits in Sacramento. And if they are successful in dissolving RDAs, the State is who we will be relying on for capital improvements in the redevelopment district. That’s a pretty bleak thougt if ever there were one.
DT: “Insufficient investment is being made in East Davis, so we should stop investing in the redevelopment district? We should be investing in the redevelopment district AND elsewhere. Cancelling the investment mechanism for downtown and South Davis does not provide more investment funds for East Davis.”
There is nothing to stop the city council from pursuing projects in the downtown with the funds that are returned by the state after RDA’s are cancelled. As it stands now, property taxes from South Davis and downtown property owners cannot, so far as I know, be used for projects outside of the redevelopment area (as shown on Rich’s map). So in fact your statement is incorrect. “Cancelling the investment mechanism for downtown and South Davis” would provide that property tax revenues from any part of Davis could be used for projects anywhere in Davis. In order for RDA funds to be used for any project in East Davis, it would have to be a redevelopment district. It isn’t.
Eliminating the RDA would allow the city council (which is the same body that is dispersing RDA funds) to consider projects in other parts of town. Presently a large chunk of the budget is off limits for all other parts of town.
Why have areas that have been blighted for decades never been considered for an RDA? Why have the issues with those shopping centers never been addressed? What could free up tax revenues to help improve East Davis?
I look forward to your forum.
We have been living large on the credit card for much too long. I think Jerry Brown maybe doesn’t have the perfect plan to get our fiscal house in order but nevertheless one that spreads the pain pretty evenly.
The business community is clamoring to leave the Redevelopment Agency intact. Local law enforcement doesn’t want any inmates shifted to the counties. None of the tough on crime crowd wants to re-work our criminal justice system. The Universities state any further cuts will severely damage the CSU/UC system. The social services community wants the in home supportive services, CALWORKS, Medi-Cal, and all mental health programs off the table. The K-12 community is demanding more funds for the public school system.
Eliminating waste, fraud, and abuse will not yield 25 billion dollars. Everyone’s Ox is going to get gored this time around.
Sue,
Reforming RDAs would be great, but it’s been tried before and failed miserably. Since the last reform the abuse has worsened and the share of our property tax dollars to RDAs has more than doubled statewide (now 12%). Any true reform that tightened the definition of “blight” would have to exclude Davis entirely because, in all honesty, relative to the rest of the state, we have no significant “blight” beyond a few parcels here and there. Olive Drive is the only part of our current RDA that could remotely make a claim, certainly not Downtown, and certainly not South Davis, which represents the overwhelming share of the Davis RDA area. Need I remind folks that South Davis was farmland when it was declared “urban blight” and subsequently became developed for some of the priciest homes in our community, as well as the auto dealerships that have benefited from diverting our school property tax dollars to the RDA?
In short, there is no serious reform that would allow the Davis RDA to continue in a meaningful way. To call Davis blighted you have to explain to taxpayers in Esparto and Knights Landing and poor communities all over the state why their income taxes, sales taxes, and vehicles license fees should be going to backfill the Davis schools to pay back the City of Davis for building parking garages and bicycle museums or any of the more defensible projects, including our “affordable” housing. That’s not an argument anyone can make with a straight face.
DT Businsessman,
In the the beginning there was the state. The state begat redevelopment agencies. If you want to kill the state, you kill redevelopment agencies. And just to be sure of this, the cities sponsored Prop 22 to make sure this is the only option. There is no other choice. Sorry.
Everyone,
It’s not about whether RDAs did good work in the past or not. Or whether their waste/fraud/abuse ratio has just reached the critical point. It’s about the future. Governor Brown knows the issue well and has determined that in these tough times, with a $25 billion structural deficit, with horrible cuts made to health and human services, our schools, and public safety, this is not an expense the state’s taxpayers can continue to shoulder. If we in our local communities can decide to invest our own property tax dollars, using the additional dollars returned to us by ending RDAs (Brown’s proposal returns millions to our city, our county and our school district) then more power to us! If any of these Davis RDA projects are as wonderful as they seem, Davis taxpayers will gladly pony up, just as we have for other tax measures. On the other hand, we may want to choose between our priorities and decide our schools come first. It should be our choice. Our choice, not Sacramento’s. That’s what the Governor’s plan says.
It’s time to move forward and support our Governor and his honest proposal to balance our budget without smoke and mirrors or saddling our children with more debt.
Let’s move on together.
Don, I never said that RDA funds can be used for areas outside of the redevelopment district. The term “we” refers to the community. I am a member of the community, I’m not with the RDA. It is unlikely that general funds will be used for capital improvements ANYWHERE in the City if the RDA is dissolved. As I already said, they’ll be gobbled up by operations. A big chunk of RDA funds is already gobbled up every year by City operations. All of it will be gobbled up if the RDA is dissolved. Where will the reinvestment come from in the absence of the RDA?
You raise a number of other issues pertaining to East Davis, Don, that deserve a separate, in-depth discussion.
Wesley506, I fail to see how your comments substantively address the RDA issue. The Davis RDA is fulfilling its mission, perhaps imperfectly. And dissolving the Davis RDA does very little in solving the issues you raise. But then again, I am a member of the clamoring business community.
The five people who vote how the RDA funds are used are the same five people who determine the city budget for operations. Maybe they could address why they would be unable to use the same funds that they had before for capital improvements if they suddenly had greater discretion over those funds.
Craig from the Core, nowhere have I advocated for the killing of the State. I have said that they should look at the waste and inefficiencies in their own programs before they cast aspersions at all the RDAs in the state, even the ones that haven’t engaged in boondogles.
Don, I have spoken to “the same five people who determine the city budget for operations” and they have assured me that once the RDA is dissolved, the RDA funds will likely be gobbled up by city operations. It is the nature of the beast. The laws governing RDAs provide the restraint. Advocating for the demise of the Davis RDA is akin to wishing for a self inflicted wound.
Craig,
By reforming RDA’s, I do not mean restricting them to blighted areas. As I described above, my concern is the lack of infrastructure and economic development investment in general. I would take the approach of restricting the use of funds to specific types of infrastructure and economic investment that are sorely needed in our cities.
Don,
First, one of the main advantages of the RDA is the very fact that it is a mechanism for the State to essentially provide matching funds local infrastructure and economic development needs. Without this carrot, I doubt that the electorate would support the needed investment.
As I said, it is just too tempting to kick the can down the road.
Sue,
Sorry for the misunderstanding, but the ENTIRE purpose of RDAs when they were created 50+ years ago was to cure urban blight. If we have other objectives, with a state purpose in mind, (affordable housing, infill, GHG reduction, mass transit) let’s decide what that purpose is and create a new financing vehicle, if necessary, to achieve that purpose. But taking school and county property tax dollars away from them without their agreement doesn’t seem like the best approach to determining local priorities for the common constituents our local entities represent. It’s time to start working together for a common purpose across local jurisdictional lines. As someone who knows the issue so well, I think you can be an exceptionally effective leader on this reform. I’m positive the Governor would be receptive to your ideas.
Respectfully,
– your neighbor
Craig,
I think it would make sense to immediately undertake reforms that broaden the RDA charge to include infill, GHG reduction, mass transit improvements, urban blight alleviation, infrastructure needs, economic development, etc. in addition to urban blight alleviation and affordable housing, as well as to define parameters and restrictions to assure that the money is productively used to achieve these ends.
That said, I think it is completely misleading to frame the argument as “taking school and county property tax dollars away from them without their agreement”. The state backfills the school money, and the counties should be made whole through pass-through agreements.
Why not say that the redevelopment agency takes tax money that otherwise would go exclusively to prisons and unfunded employee liabilities, and uses it for tangible public infrastructure improvements?
DT Bizness guy,
You said: “And if we’re to dissolve a governmental entity for fiscal mismanagement, the first to go should be the State.”
Sorry, I failed to see the distinction from being “dissolved” or “killed”. As a fan of the Wizard of Oz, Im not sure which is worse.
My point was that Redevelopment is a state created program. Thus, the state is responsible for curtailing the waste within it just as it is responsible for other state programs (Agree not good at curtailing that waste either!). But the League of Cities has prevented the state from truly controlling waste in RDAs by sponsoring Prop 22 that now prevents the Legislature from enacting any changes to the property tax distribution, the core of the program. Governor Brown and the Legislature have no choice left but ending/phasing out Redevelopment. Major reform cannot happen now without changing the Constitution. The Redevelopment Industry (Develeopers/consultants/lawyers/city councils) have cooked their own goose and all the golden eggs it has laid and continues to lay at the expense of others. Another example of ballot box budgeting run amok.
-Your neighbor within the Redevelopment Area who would rather have his taxes go to the school district just like the taxes of people in the rest of Davis
Again, Craig, I think it is unfair to frame this discussion as a “schools versus infrastructure” situation. Why not an “infrastructure versus prisons and unfunded liabilities” thing? That was a rhetorical question, of course.
I visited Seoul, Korea last fall. I was astonished at the public infrastructure investment that had been made by a city whose per capita income is still significantly below ours, and whose per capita income had been only about $100 a year in 1960. I was astonished by the beautiful bridges, the incredible network of high-speed trains and subways, and the magnificent public park/bikeway that runs the entire length of the Han River.
Surely, if the United States does not step up to the plate in terms of public infrastructure investment, we will be left in the dust. Redevelopment Agencies began as a mechanism for alleviating urban blight, but as Prop. 13 dried up local tax revenues, they have slowly taken over much of the burden of urban infrastructure investment.
For those who suggest that we develop a new mechanism for urban infrastructure investment and economic development loan assistance, I would like to offer the suggestion that you first create that alternative mechanism before you dismantle the redevelopment agencies.
When I figure out how to post pictures, I will show you a picture I took of one of the many bridges and part of the park/bikeway that runs the entire length of Seoul’s Han river. This bridge has a water fountain that runs the entire span that is lit up at night with various colored lights. I will also show an overview of the river and its many bridges, each more beautiful than the next.
The United States and our cities cannot afford to ignore investment in our public infrastructure and economic development.
Sue,
you said…
“For those who suggest that we develop a new mechanism for urban infrastructure investment and economic development loan assistance, I would like to offer the suggestion that you first create that alternative mechanism before you dismantle the redevelopment agencies. “
I think you’re on to something. Let’s talk.
– your neighbor
I think Brown’s proposal to do away with CRAs is throwing out of the baby with the bath water. Visit downtown Winters to see an example of good CRA. The problem, like for many well meaning and well conceived government-led programs, is drift from the program’s initial intent. All we need is a more specific definition of urban blight and some state government leadership on best practices and cross-jurisdictions cooperation. Brown should look to scale back the scope of RDA, but not do away with it. Doing away with it would have some ugly unintended consequences.
For example, David brings up the issue of periphery development. Lacking redevelopment assistance from municipal government, the pool of potential private developers and business owners willing and able to take on redevelopment, shrinks. Fewer projects pencil out, and instead, these developers and business owners start looking for Greenfield land to build on. This means more pressure for periphery development. Davis has mostly rabid anti-growth townspeople that will burn most periphery projects at the stake. However, Winters has only Debra DeAngelo.
I agree with Sue, reform, refocus, but not abolish. Besides, isn’t old moonbeam looking in the street for his nickel after having lost it in the basement?
This from the California Redevlopment Association:
[quote]The State’s own numbers show that killing redevelopment will bring very little financial relief for the State. That’s because redevelopment agencies have more than $87 billion in bond and other contract obligations in place that must be repaid before funds are available for other purposes. In fact, after this budget year, the State Department of Finance acknowledges zero State savings from shutting down redevelopment.[/quote]
Puh-leaze!
It took this long for the RDA Development Industrial Complex to weigh in? If we want to start looking at real independent analysis, let’s start with with the highly regarded Legislative Analyst Office:
http://www.lao.ca.gov/handouts/state_admin/2011/Redevelopment_1_19_11.pdf
“No Reliable Evidence That Redevelopment Agencies Improve Overall Economic Development in California. There is no reliable evidence that redevelopment projects attract businesses to the state or increase overall economic develop- ment in California. The presence of a redevelopment area might shift development from one location to another, but does not significantly increase economic activity statewide.”
I’ve got gobs more if you want it. But honestly, there is no credible case to be made for maintaining the status quo. None.
“there is no credible case to be made for maintaining the status quo”
Who said I was for the status quo?
In some cities CRAs have been very effective. Get rid of the ones that are not. For those that work well, this move by Brown translates into: “screw your local economy and blighted areas, my campaign-donating unions of teachers and firefighters deserve the money instead!”
This bothers me regardless of the claims of lack of economic benefit. Brown has diverted the state budget mess back to local communities again, and managed to be another politician demonizing those that work in the private economy (developers & business owners). The public employee unions are sure creative though… or maybe desperation makes them think harder about where to scare up more money to delay the inevitable financial collapse they are causing.
What would Winters and Culver City look like without CRA? Probably a place that fewer teachers and firefighters would want to work.
Jeff,
Whooooooa! I think you may have missed one of the key points of Gov. Brown’s proposal which is to[u] leave these decisions to the the marketplace[/u] as well as local communities, without government intervention. If you want a Repubilcan businness perspective on Redevelopment, and how it picks winners and losers in the private sector, check out Assemblyman Chris Norby’s website for a free market/business perspective on this issue (The numbers are outdated, but the points are the same for today):
http://www.redevelopment.com/norby/toc.htm
“Chapter 1
There is an unknown layer of government in California, which few understand.
This unknown government currently consumes 8 percent of all property taxes statewide, $1.5 billion in 1997. It has a total indebtedness of over $41 billion.
It is supported by a powerful Sacramento lobby, backed by an army of lawyers, consultants, bond brokers and land developers.
Unlike new counties, cities and school districts, it can be created without a vote of the citizens affected.
Unlike other levels of government, it can incur bonded indebtedness without voter approval.
Unlike other government entities, it may use the power of eminent domain to benefit private interests.
This unknown government provides no public services. It does not educate our children, maintain our streets, protect us from crime, nor stock our libraries.
It claims to eliminate blight and promote economic development, yet there is no evidence it has done so in the half century since it was created.
Indeed, it has become a rapidly growing drain on California’s public resources, amassing enormous power with little public awareness or oversight.
This unknown government is Redevelopment.
It is time Californians knew more about it.”
Craig, there are a number of community priorities/values/needs that the marketplace places little value on or are too difficulet to quantify. For example, our community has for decades placed a very high value on having a compact city surrounded by greenbelt. Yet, the marketplace has decided that it has very little interest in pursuing opportunities within this constraint. Instead, the marketplace over and over again has pursued greenfield development. “Government intervention” is necessary to spur private infill development. The development around 5th and G Street is a classic example. The parking structure would not have been built without RDA funds. This RDA funding purred the development of the movie theater / office / retail complex, Village Pizza, the Roe Building, and the soon to be built YFCU.
Downtown San Diego is a great example of redevelopment done right on a very large scale. It is unlikely to have occured without “government intervention”.
Craig, it is not about the Wizard of Oz. You are misrepresenting my position. What you said about my previous statement is true only by having edited out the word “if”. Where I come from “if” creates a conditional statement. I have not advocated for dissolving or killing any government entity or program. I am advocating for the retention of the Davis RDA.
Nice opinion piece in Sacramento Bee today.
[url]http://www.sacbee.com/2011/02/08/3384812/find-compromise-in-redevelopment.html[/url]
Jeff Boone: Get rid of the ones that are not. For those that work well, this move by Brown translates into: “screw your local economy and blighted areas, my campaign-donating unions of teachers and firefighters deserve the money instead!”
I think you’re taking a reflexive anti-Democratic spin rather than a pro-conservative view on this. There just might be conservative reasons to support this. Do you want to operate under a state-imposed government structure, or develop one that is more locally responsive?
If teachers have true effective political power, then it really hasn’t played out that way so far. K-12 education has taken more than its proportion of state cuts up until now. Which do you think might offer more return on the investment? Investing in human capital (education) or investing in physical capital (RDA projects)?
“There is no reliable evidence that redevelopment projects attract businesses to the state or increase overall economic development in California. The presence of a redevelopment area might shift development from one location to another, but does not significantly increase economic activity statewide.” This widely utilized quote by the LAO is suspect on its face. How does the LAO know what private investors, spurred on by Davis RDA capital investments, would have done with their capital in the absence of said capital investments? Did they question Randy Yackzan, Nestware, Chuck Roe, Village Bakery, Mark Rutheiser, Mark Friedman, Regal Theaters, Dr. Steve Nowicki, El Mariachi, to name but a few of the business and developers that have invested in the Davis Redevelopment District? Not to my knowledge. For all the LAO knows, these private investors would have invested their capital in some overseas-oriented stock fund.
However, I’d like to think they are right about shifting “development from one location to another”. I’d like to think the Davis RDA has met with some success in shifting development from peripheral sprawl to urban infill. And my hope is that the RDA will continue to spur such a shift.
Steve, the link you provided appears imcomplete.
“I think you’re taking a reflexive anti-Democratic spin rather than a pro-conservative view on this.”
I agree that I am giving thus the anti-Democrat spin since it is clear that Brown is seeking to grab dollars that would be redirected to PEU pockets.
My conservative view on redevelopment has to do with my sensibilities supporting government-funded infrastructure development, or at least the coordination of multi-stakeholder and/or multi-jurisdiction, economic development. Understanding the rational pursuit of self interest, the cornerstone of free market capitalism, it remains clear that redevelopment would not happen to the extent it does… certainly not coordinated redevelopment… without RDAs or something like them. I more prefer government spending tax resources on infrastructure that promotes economic opportunity that generates taxable economic activity, than it does spending on social programs that attempt to legislate outcomes. Frankly, I am not in support of finding ways to funnel more or different money to public education, since I am convinced the old model will not sustain this nation going forward. I would prefer that the economic realities force more privatization so we get much more innovation.
I have not looked at the methodology used to come up with this new wisdom that RDAs have had no positive financial impact to the state. However, I am suspect that there are missing pieces. For one, this state-wide view misses the point that there are many projects benefiting specific communities. So, do we punish these communities because of the bad apples?
One idea is for the state to develop a certification process for RDAs with a bi-annual audit/review. Those not meeting performance expectations (e.g., demonstrating their projects have resulted in adequate economic benefits) would lose their certification.
DT: the Sac Bee link works fine for me. You should be able to just click on it, even though the whole link doesn’t show.
Jeff: “One idea is for the state to develop a certification process for RDAs with a bi-annual audit/review.”
The Davis RDA, presumably like all others, is audited. You can find the results here: [url]http://cityofdavis.org/finance/StateControllerReport/[/url]
dmg: “Otherwise every non-basic aid school in the state gets the same per pupil. Could RDA money going back to the schools push more districts into the basic aid category. I don’t know enough about school financing to tell you, but it is possible”
Based on what I read from LAO’s office, the RDA funds will be turned back to “local successor agencies”, which could then spend the money on its own schools. If I am correct in my assessment of how it works, this would definitely favor those schools in areas where property values are higher…
ERM: Based on what I read from LAO’s office, the RDA funds will be turned back to “local successor agencies”, which could then spend the money on its own schools. If I am correct in my assessment of how it works, this would definitely favor those schools in areas where property values are higher…
What I think you are missing is that property tax revenue will only reduce what the state has to supplement to reach the set “revenue limit level”. The only way it favors affluent districts is if it turns a non basic aid district into a basic aid district.
DJUSD is a bit far from reaching basic aid status.
I think one point is really getting lost here in this very excellent discussion. RDAs were specifically formed to encourage economic development, in the hopes that it would spur the increase in tax revenue generation.
I think to a certain extent that has actually happened in Davis. Bc Davis has used its RDA money wisely, our property values (residential and commercial) have continued to rise and have not suffered too terribly during the economic downturn (whereas other cities have not fared so well). Those high property values generate higher tax revenue.
I would also add that Hanlees contributed significant amounts of money to our local schools when we needed it. So did other successful businesses. Think about that… having all those “amenities” like a new train station, new restaurant, bicycle museum, infrastructure improvements increase the property values and economic vibrancy of our town, which benefits our schools. Good schools benefit our economic vibrancy. Do we really want to eliminate RDAs altogether, IN THE HOPES THAT ALL THE RDA MONEY WILL TRICKLE DOWN TO OUR SCHOOLS?
If you read the LAO report, the RDA funding will be turned over to the “local successor agencies” to be spent on RDA debts/obligations, MediCal, cities, counties, special districts as well as schools. Do you honestly think the RDA money, when all is said and done, is going to make a significant dent in the school budget problem?
If my reading of the LAO report is correct, $37 billion is spent on schools. $5 billion is diverted to RDAs. But if even all $5 billion is turned back for local control (I suspect the state will skim off certain amount – call me cynical), that money cannot just go to pay for schools. It also has to be returned to pay to retire RDA debt and obligations, to pay for MediCal, returned to cities, counties, special districts, etc., etc., etc. So how much do you think is actually going to be left for our schools when all is said and done?
Don: Thanks for the link. What I don’t see here is a program audit from a state agency. The independent audit comes close, but there isn’t any operational assessment of the RDAs achievement of economic goals… at least that I can spot.
I do though, have a question related to this report. The P&L statement shows $10.4MM of property tax revenue, and expenses of $9.8MM in pass-through agreement payments, and $1.9M in debt service payments. There is $500M in interest revenue on the liquid assets, and another $300M or so netted from fees collected from the program.
If I understand this accounting correctly, not only would there be little additional funds available after tax revenue is collected and pass-through and debt service payments are made… but the loss of interest income (assuming the city expedites the spending of existing redevelopment funds), and the loss of fees earned from redevelopment activities would appear to make the ongoing entity insolvent (expenses exceeding income with zero operating cash reserves). What am I missing here?
ELAINE: [i]”Based on what I read from LAO’s office, the RDA funds will be turned back to “local successor agencies”, which could then spend the money on its own schools. If I am correct in my assessment of how it works, this would definitely favor those schools in areas where property values are higher… “[/i]
I think that is wrong.
My interpretation is this: marginal property tax monies in redevelopment zones, which would go to the schools were there no RDA, now are going to RDAs. The RDAs then pay a portion of the schools’ monies back to the local school districts. But the amount they pay back is insufficient, so the state backfills their payments out of its General Fund. As such, [u]the existence of RDAs is a net neutral to the schools[/u].
With the elimination of RDAs, all of the property tax money in a redevelopment zone which is owed to the schools will go directly to the schools. It won’t pass through the RDA first. However, local property tax money is not the full amount of funding that the K-12 schools get. They will continue to get General Fund money from the state. The state GF money (“revenue limit dollars”) going to schools will be allocated disproportionately to districts which raise less in property taxes. As such, rich districts (except the half dozen or so which don’t get GF money) will be no better off with Brown’s plan. And therefore, [u]the elimination of RDAs will be net neutral to the schools[/u].
Here is what the LAO says regarding that:
[i]”Redevelopment agencies receive approximately $5 billion of property tax revenue that would otherwise fund school districts, cities, counties, and special districts. The redevelopment agencies “pass through” about $1.1 billion to local agencies based upon negotiated agreements and state statute. Of this amount, approximately $300 million is passed through to schools with only $40 million offsetting state education costs.
“The state General Fund must backfill the remaining property tax revenues diverted from K-14 schools, at a cost of over $2 billion annually.”[/i]
Rich: see my previous post and tell me what I am missing. It looks like Davis RDA is taking in $10.4MM and passes-through $9.8MM. However, there are also debt service expenses of $1.9MM (or $1.3MM… there appears to be a discrepancy in the report). Add this up and there would be no additional money going to Davis schools and the RDA entity is in fact insolvent without other revenue sources.
Jeff, I will get back to your question after dinner tonight (unless I go brain dead and forget). I am busy with work for the next 3-4 hours.
A new report from the LAO came out today supporting the Governor’s plan, with additional suggestions. It goes into more depth than their earlier report. Here it is:
[url][/url]http://lao.ca.gov/analysis/2011/realignment/redevelopment_020911.aspx[url][/url]
The state GF money (“revenue limit dollars”) going to schools will be allocated disproportionately to districts which raise less in property taxes. As such, rich districts (except the half dozen or so which don’t get GF money) will be no better off with Brown’s plan. And therefore, the elimination of RDAs will be net neutral to the schools.
But it would be a benefit to the overall general fund, because less general fund would be required for revenue limit to the schools.
“Jeff, I will get back to your question after dinner tonight (unless I go brain dead and forget). I am busy with work for the next 3-4 hours.”
Rich: No worries. Don’t reply if you are brain-dead because that will make two of us!
“But it would be a benefit to the overall general fund, because less general fund would be required for revenue limit to the schools.”
I guess we could look at this as a form of altrusim… giving up the benefits of good RDA in Davis for the broader benefit of more funds to help shore up our state budget while providing some more education dollars to poorer areas in CA. Hmm seems a bit like: “from each according to his ability, to each according to his need”. I think Karl would have liked this approach.
Okay, Jeff, I am back.
[i]”Add this up and there would be no additional money going to Davis schools and the RDA entity is in fact insolvent without other revenue sources.”[/i]
I plugged in all the numbers from the report on Excel and here is what I get:
Total Income — $12,934,185
Total Expenses — $14,706,242
Operating Loss — ($1,772,057)
Other Financing Sources — $13,289
Deficiency of Revenues — ($1,758,768)
That confirms what you thought. However, the DRDA had built up equity to begin the year and this loss simply drew from it. These numbers follow the Income Statement:
Beginning Equity — $39,480,340
Deficiency of Revenues — ($1,758,768)
Prior Period Adjustments — ($862,365)
Ending Equity — $36,859,207
That said, there is one particular line item in the so-called “expenses” which is not an accounting expense. (At least when I studied accounting it was not an expense.) That is the $1,800,000 purchase of real estate. That represents negative cash flow in 2010, but it is not accurately an expense.
Conveniently, that $1.8 million is slightly higher than the $1.7 million Operating Loss.
Note: I would have to look it up to know what property the RDA bought for $1,800,000. I don’t recall hearing that number before. It would not suprise me at all to learn our RDA got ripped off.
Here, FWIW, are the itemized “expenses” (by which this audit confuses with negative cash flow):
Admin. Costs — $1,096,451
Planning, Survey & Design — $117,627
[b]Real Estate Purchases — $1,800,000[/b]
Interest Expense — $1,336,037
Pass Through Payments — $9,574,654
Tax Allocation Bond and Notes — $610,000
City/Cnty Advances & Loans — $171,473
Total — $14,706,242
I guess we could look at this as a form of altrusim… giving up the benefits of good RDA in Davis for the broader benefit of more funds to help shore up our state budget while providing some more education dollars to poorer areas in CA. Hmm seems a bit like: “from each according to his ability, to each according to his need”. I think Karl would have liked this approach.
A good part of the state deficit is due to property values declining (think of all the foreclosures and short sales) and not as much property tax revenue providing funds for schools and the state having to give more GF money toward revenue limit. Figure out how to overturn Serrano v. Priest, then maybe you could get your way. This has been the situation for decades now.
Rich, the RDA purchased the Teen Center from the City for $1,800,000.
The RDA got ripped off by the City, i.e. the left hand ripped the right hand off.
“…the RDA purchased the Teen Center from the City for $1,800,000.”
Why?
“wdf1: A good part of the state deficit is due to property values declining”
I think Serrano v. Priest was a mistake since the courts did not seem to take in consideration resident mobility (e.g., if you don’t like your public school district then move); however, I appreciate your point. You can also make the case that, despite Serrano v. Priest and prop-13, property tax revenue have been over inflated for 20 years from over inflated property values, and that now it is back to equalibrium. Given that we should have developed an operating surplus over the last decade prior to 2008. We were running deficits when times were good. It can’t help but hurt now.
Rich: “Deficiency of Revenues — ($1,758,768)”
Wow. This is not a good number. In addition, given that some of the revenue appears to be the result of activities that would cease under Brown’s plan, wouldn’t the city have to make up the short fall… at least until all the debt obligations were met?
Rifkin: “My interpretation is this: marginal property tax monies in redevelopment zones, which would go to the schools were there no RDA, now are going to RDAs. The RDAs then pay a portion of the schools’ monies back to the local school districts. But the amount they pay back is insufficient, so the state backfills their payments out of its General Fund. As such, the existence of RDAs is a net neutral to the schools.
With the elimination of RDAs, all of the property tax money in a redevelopment zone which is owed to the schools will go directly to the schools. It won’t pass through the RDA first.”
According to what I read in the LAO report is the former RDA funding will pass through a “local successor agency”, which I take to mean a LOCAL SUCCESSOR AGENCY MUCH LIKE THE RDA IN VESTED INTEREST…
JB: “I do though, have a question related to this report. The P&L statement shows $10.4MM of property tax revenue, and expenses of $9.8MM in pass-through agreement payments, and $1.9M in debt service payments. There is $500M in interest revenue on the liquid assets, and another $300M or so netted from fees collected from the program.
If I understand this accounting correctly, not only would there be little additional funds available after tax revenue is collected and pass-through and debt service payments are made… but the loss of interest income (assuming the city expedites the spending of existing redevelopment funds), and the loss of fees earned from redevelopment activities would appear to make the ongoing entity insolvent (expenses exceeding income with zero operating cash reserves). What am I missing here?”
NOTHING. ONE OF THE CRITICISMS OF BROWN’S IDEA OF DOING AWAY W RDAS IS THAT THE AMOUNT OF FORMER RDA MONEY THAT WILL BE LEFT FOR SCHOOLS AFTER RDA DEBT/OBLIGATIONS ARE PAID, AND THE FUNDING IS ALSO USED TO DISTRIBUTE TO CITIES, COUNTIES, SPECIAL DISTRICTS, AND TO PAY FOR MEDICAL, THERE WILL NOT BE MUCH LEFT TO GIVE TO SCHOOLS. AND OF COURSE THAT DOES NOT COUNT ANY MONEY THE STATE DECIDES TO SKIM OFF FOR “ADMINISTRATIVE COSTS” BEFORE THE FORMER RDA FUNDING IS DISBURSED…
Elaine: “With the elimination of RDAs, all of the property tax money in a redevelopment zone which is owed to the schools will go directly to the schools. It won’t pass through the RDA first”
It appears, at least in the situation in Davis, that most of the tax revenue is already being passed on.
Elaine: the state has already been shifting RDA money to other budget categories, something like ten times over the last decade.
Also, an important difference is that the successor agency could use the funds for projects outside of the defined RD area. Currently all of the projects have to be within the area (as far as I can tell), and in practice every project I’ve seen listed has been in or near downtown Davis. I have no quarrel with projects to boost downtown business, but I think it’s time that some other neglected parts of the city receive this largesse. Presently there is no way to use those funds elsewhere.
Did you see Brian Sway’s commentary in the Enterprise yesterday? What an absolute disservice to the community to spread misinformation in such a fashion. I can understand advocating for the dissolution of the Davis RDA utilizing facts and reason as some have done in this blog. But why is it necessary to mislead the public to advance a policy or cause? If the policy or cause is worthy, wouldn’t the facts and reason support it? Perhaps I’m being naive, or idealstic, but such tactics really grind on me.
Sway’s claim that the city-owned Varsity and old City Hall are at “very low rental rates” is absurd. The rent schedules for both properties are at market rates. We know this to be true because they are a matter of public record. Furthermore, he argues that the Davis RDA’s “track record isn’t very impressive” by citing a very truncated list of RDA accomplishments. A very different story would emerge were he to cite a comprehensive list of Davis RDA accomplishments.
Finally, Sway lists only the public/private RDA projects so that he can besmirch the RDA and private businesses with the claim that these projects were “…certainly good deals for the successful applicants…”. Again, why doesn’t he list all the public infrastructure projects that the RDA has funded? Frankly, I am in no position to know if these were good deals for the successful applicants. I find it hard to imagine that Sway is in a better position to make such a determination. But I do know this, I hope the projects cited by Sway were good deals for the applicants because they have been good deals for the community. That’s the way successful partnerships work; they’re good for all the parties. And because they are successful, they spur additional succesful projects. That’s the whole point of redevelopment.
I’ll conclude my diatribe with a final observation. I have followed the local media quite closely in my three, short years in the Davis community. I do not recall in this brief time ever reading about a boondogle in which a developer or business person fleeced the Davis RDA. I have not heard of such a case having happened prior to my arrival. Who are all these unnamed developers and business people making a killing at the Davis RDA’s expense? Where were all the insinuations and public outrage regarding supposed Davis RDA boondogles prior to Gov. Brown’s proposed budget?
Another point regarding the supposed Davis RDA boondogles, where is the long line of developers and business people waiting for their Davis RDA handouts? The line is actually brutally short. The opposite would be the case if the Davis RDA were enriching developers and business people left, right, and center. As Dunning is fond of saying, trust me on this.
I think this is loosely on point since the root cause of the problems inspiring old moonbeam to seek funds, and the reason the city of Davis is struggling… is the relatively high cost of government employees.
[url]http://www.laweekly.com/2010-10-14/news/a-stink-in-el-segundo-over-cadillac-salaries/[/url]
[url]http://www.reuters.com/article/2011/02/09/us-economy-states-pensions-idUSTRE7176RS20110209[/url]
There is a private-sector vs public-sector war brewing. This will get ugly quickly. Brown appears to be lining up on the wrong side of this war…. in his state that has the biggest problem.
jb: “According to what I read in the LAO report is the former RDA funding will pass through a “local successor agency”, which I take to mean a LOCAL SUCCESSOR AGENCY MUCH LIKE THE RDA IN VESTED INTEREST…”
This is what I said – you credited me for something Rich Rifkin said…
Correction: To jb:
In this article you will see education experts estimating benefit to schools in the range of $170-350 per student annually, growing over time.
Brown’s plan to cut redevelopment agencies would be a boon for schools
[url][/url]http://www.dailybreeze.com/education/ci_17331448[url][/url]
In his comments you will see that Craig has not read the entire article. Some excerpts from the article:
“However, officials have also avoided taking a position on the governor’s proposal, citing concerns about the vague language and whether it would actually result in increased funding for education.
The state Legislative Analyst’s Office, for instance, wants to eliminate the CRAs, but use the money to decrease California’s own deficit.
“The state has made promises to schools before and then, when you look at the details, things are not quite as promised,” said LAUSD spokeswoman Lydia Ramos.
OR
“No doubt this would bring in good revenue to the school district … but you never want to be fighting something that could potentially stimulate jobs,” Zimmer said.
“You don’t want to rob Peter to pay Paul.”
The article that Craig cites actually does a great job of highlighting the argument being made by the schools advocates who wish to eliminate RDAs. There will be greater funding available to the schools if one cuts or eliminates other critical governmental services/functions. Duh!
But why stop with the RDAs? Let’s eliminate the public works departments. Let’s eliminate the planning department. Let’s eliminate the building department. Let’s eliminate the fire department. Let’s eliminate the police department. Let’s eliminate all these governmental functions so that when our children graduate from high school they have these wonderful jobs and wonderful community to enjoy. Let’s rob Peter to pay Paul.