I spent 12 years on the local redevelopment agency board, coincident with my service as a city councilman in Sonoma. During that time, recovering a piece of local tax revenue in a booming economy that would otherwise have been unavailable and that was used to cure blight, build affordable housing, and promote economic development felt good and seemed proper; some excellent projects were completed.
That said, in today’s troubled and stressed economy, property taxes would be better used to balance the state budget and thereafter be distributed to the counties and cities without restriction on their use. This is what Governor Jerry Brown has proposed, and I support his proposal.
Unfortunately, my support places me in opposition to the California League of Cities, and most public officials. While I understand the position of those who want redevelopment funds to continue flowing, I don’t agree. Too often redevelopment funds are used in ways for which they were never intended, have not produced enough affordable housing, and with a deficit of $25 billion the State of California is at serious risk of future financial default on bonds and fixed obligations.
The usual limitations placed on the spending of redevelopment funds include a set-aside of 20 percent for affordable housing. This has, in my opinion, always been too low a threshold, and should have been closer to 50 percent. That fact notwithstanding, if in the future (as proposed) tax revenues are to be returned to the communities from which they are collected, money for affordable housing will still be available. It’s a matter of community priorities; placing revenues under the direct control of each community allows for greater flexibility of use and ultimately increased local financial security. As it is today, all types of financial/accounting games are played between cities and their redevelopment agencies in order to gain this type of flexibility. I know this is true; I used to approve it.
In order to help solve our state’s serious financial crisis, we must abandon many of the systemic mechanisms and habits that have contributed to the problem. Unless a spirit of sacrifice and a willingness to collectively share scarce resources in a better way emerges within the public sector, California will continue to suffer from economic dysfunction.
Governor Brown has been brutally honest, and is generally taking a no-nonsense approach to finance, this in contrast to what has happened over the past eight or more years. Just as the cities and counties played games with redevelopment funds to make budgets “balance,” so have the legislature and executive branches played games with tax revenue, fees, obligations and liabilities. The time for these types of budget games is over; California needs to grow up and take its medicine, no matter how bitter. It’s either that, or the economic sickness will continue and get even worse.