A few months ago I was an invited speaker addressing “eminent domain” at an event in the city of Carson where their redevelopment agency was bailing out Cormier Chevrolet due to a cash call by GMAC that the dealer could not meet. At that time we recognized that auto dealerships in CA was closing in record numbers. Without rehashing the Cormier story, today’s OC Register account entitled “court clears way for Chrysler sale” opens the door for a massive closure of dealers across the nation.
While we have legislation that protects local sales taxes resulting in tax sharing where neighboring cities “raid” one of your dealerships, what happens when auto dealerships are closed by the manufacturer and you are hung out to dry as you have invested millions of redevelopment agency funds to lure these dealerships to your city?
Having recently inquired into auto dealership sales tax revenue around the state this segment generates between 10 to 20 percent of all sales tax realized by local cities. In reading another key story in today’s Register entitled “Mayors urge governor to cut cities a break,” you will discover that the Terminator is floating a trial balloon to cover our state shortfall by taping into local property and gasoline taxes. Therefore, local elected officials and staff had better go back to the drawing board in revising their budgets for the next two fiscal years.
Let’s face it. The clock continues to run as CA runs out of cash. The only good news in today’s paper is that the Magic defeated the Lakers last night.
We go away for three weeks and return to today’s above the fold headline about Orange County which reads “BUDGET CUTS SKETCHED OUT.”
Welcome home Larry?
There are gonna be a lot of holes in RDA project areas. More “blight” to get rid of?