So, I finally got around to actually watching last week’s City Council meeting. Yeah, it may take me some time, but I actually do watch them. One of the more meatier items up for discussion was a budget update which Michele Ellson covered here. What didn’t get conveyed in its full glory was the very visible frustration with the whole business that was evident in every single statement made by Interim City Manager Ann Marie Gallant who chalked up the state budget as a “ponzi scheme of borrowing from cities and counties” and saying that the state has chosen to not make the hard decisions and leaving it up to the local government to make the tough decisions about how to balance its own budgets since the state is doing it on the backs of cities and counties.
A report from the New York Times mentions that rather than raiding gas tax (which makes folks really really upset) the state is considering taking away from the Redevelopment agencies — to the tune of $1.7 billion — which seems to make some folks in Alameda really really happy. However, if the state is successful in taking away from Redevelopment agencies, they aren’t going away empty handed. In a bit of tit for tat, the Redevelopment agencies will be able to extend their project areas for an additional 40 years without needing to find an area “blighted” which traditionally is the trigger to be able to define a redevelopment project area. Here’s how it would work from the LA Times:
…Redevelopment areas exist only for limited periods of time…The new law would allow those time limits to be extended for as much as 40 years without a finding of blight.
Many redevelopment agencies and the California Redevelopment Assn. oppose the measure, contending that it is unconstitutional and distorts the purpose of laws aimed at ending blight.
In return for the extensions, the state would get a quick infusion of cash. The law would allow the state to borrow at least $7.4 billion against future revenues. That would be made possible by a provision that would give the state 10% of the increase in property tax revenue in the redevelopment areas over those four decades.
It is unclear if the proposal is legal. To enact it, the state would need to obtain a favorable court ruling by Dec. 1…
So what’s worse, a takeaway of money now for a short term boo-Redevelopment victory or Redevelopment project areas around for another 40 years? Personally, I don’t think Redevelopment project areas should be continually re-upped and renewed, they should serve whatever specific purpose they were created for to eliminate whatever blight was indentified and be done with. The San Bernandino Sun had a good article about the problems with trading off a short term fix for the state with another 40 years for Redevelopment project areas:
…Kathy Thomas, director of San Bernardino County’s redevelopment agency, said if a redevelopment agency had planned on collecting tax increment for 45 years, the state plan would push it to 85 years.
“At that point, who are you dealing with?” she asked. “Do people even know the original intention of the project area?”
Greg Devereaux, Ontario’s city manager, said the state’s extension of a redevelopment agency would not require that the redevelopment area need more money or have more problems to address.
“This is not being done in a circumstance of need necessarily,” he said. “This doesn’t require any blight findings. … This is much broader.”…
The redevelopment extension proposal didn’t pass the Assembly. The State will still be taking (or trying to take) the $1.7b from Redevelopment. But the “City of Industry plan” will not be an option that allowed the 40 year extension was something else entirely and did not make it into the final budget legislation.
Comment by V Smoothe — July 28, 2009 @ 3:38 pm
Good to see that other councilmembers (video of deHaan) are helping to protect Alameda’s redevelopment funds from state raids. D. Howard gives too much credit to Councilmember Tam.
http://www.saveyourcity.net/index.cfm?setid=09E45434-1851-66EF-E28294171AA43907&page_var=/player/vid_prime.cfm&prekey=Alameda
Comment by David V. — July 28, 2009 @ 3:47 pm
Thanks V!
Here’s a “what the…?” article about the 40 year plan being pulled.
Comment by Lauren Do — July 28, 2009 @ 3:49 pm
While I would rather support increasing state revenue by added gas taxes to create incentives to use less gas, and I would rather see more increases in ‘luxury taxes’ (new car tax, or old DMV registration rates brought back, boat taxes, only one residential parcel per person eligible for Prop 13 protection of 2% valuation increase / year with additional properties valued at an increased, but defined or scheduled increment…) – that kind of stuff aside; -some burdens should be placed on localities so that local decisions on what the real needs are can be locally defined. We as society, need this ‘reality-check’ to reconsider the difference between needs and wants, “rights” and privileges. We have moved to legally requiring everyone to “live a life of luxury” – just to meet local codes. We have made or redefined our extremely high standards and quality of life to be considered basic entitlements. Is there any question why such an unsustainable path would collapse?
For me another part of the problem lays where the incredible sums of CA tax money being spent does not require tax-payer approval. Our legislators approve billions on unnecessary costs. It is not just the expenditures; it is also the laws they pass that require such expenditures.
As for re-dev; Re-dev laws never defines “blight” anyway, and that is a term most abused. The loss of the requirement for blight is therefore almost meaningless. Also you may remember that our CC already removed some of the “sunset dates” when they merged some of our city’s re-dev zones, so it is not like the developers friends were not able to work around that either. The reason developers and their partners are upset is that they know the conditions now being offered in exchange (for a part of our taxes the state needs) were basically never obstacles anyway.
The re-dev game is perhaps the biggest ball and chain they have shackled to us taxpayers. There are really, truly great things that can be accomplished w/ re-dev, (Yeah, I actually believe that!) but all re-dev bonds should require ballot approval. The current laws dismissing voter choice makes the re-dev one of the biggest give-a-ways in our history. When the projects are vital, the voters will approve – after all, what else makes it vital? Now Re-dev is a give-a-way to developers which makes a huge difference in election funding, and therefore how and who get elected and continue to give away our money which should be serving such basic needs as health and education.
Comment by dk — July 28, 2009 @ 3:52 pm
City of Industry (near LA) has a re-dev debt of over $1M/ per capita. That is even before the new stadium.
With all that re-dev in that city – I guess no one wants to move there?
Comment by dk — July 28, 2009 @ 3:56 pm
# 4
Well, which is it? First you want to raise taxes (gas, luxury, auto, property, and local) then you moan about the “incredible sums of money being spent”. So I guess you want to raise taxes but quibble about how it’s spent. How about just letting us keep our damned money and let us decide our priorities?
Comment by Jack Richard — July 28, 2009 @ 5:51 pm
#6:
Our state is in such a mess that we have to do both: raise taxes AND cut expenses. These two things are not mutually exclusive.
Comment by Jill — July 28, 2009 @ 9:40 pm
#6 Jack – Jill states the obvious, and both taxation and tax revenue expenditures deserve attention and ‘quibbling’ by we-the-people.
Ain’t it so?
Comment by dk — July 30, 2009 @ 11:15 pm