Abuse of Power
In today’s Sacramento Bee political columnist Dan Walters raises the $64,000 question.
Is “redevelopment money a valuable tool or slush fund?”
Quoting from his editorial “Cities became very creative in defining blight and using redevelopment funds to subsidize auto malls, shopping centers and other generators of sales and property taxes and diverting billions of dollars from schools, counties and other local governments – eventually $5 billion-plus a year.
Legislative reforms to curb redevelopment abuses were enacted in the 1990s. Ever since, local agencies have been trying to chip away at restrictions on defining blight and using redevelopment funds to subsidize development in unlighted areas.”
Gilbert comments. Everyone has seen reports on the size of our state budget deficit. We see shortfall numbers in the $20 billion dollar range. It is so bad that we will not have a budget until the next governor is elected.
How many readers are aware of our total CRA indebtedness (as reported to the state controller). CRA being the California Redevelopment Agencies whose bonded indebtedness (for the fiscal year 2007-08) is $92,791,528,000. That is almost $93 BILLION dollars.
Sadly while there are valid blighted areas in our state requiring redevelopment, the local CRA agencies have been diverting much needed funds away from police, fire, schools and special districts for the past several decades. These funds go to special interest projects, such as big box stores, entertainment centers and auto malls where developers reward many of these same council members with financial support of their reelection campaigns.
I can recall the guard gated community Indian Wells, with an average income over $200,000, where they used their redevelopment agency to create a golf course in a very wealthy area near Palm Desert. They shifted their 20% set-aside affordable housing obligation to a nearby city. Although the laws have been tightened up somewhat since then we have a long way to go to stop these form of abuses.
In response to my argument that calling our city blighted was a “bogus” declaration, a prior Mission Viejo City manager said “don’t blame him for abusing the system, change the law.” Paraphrased.
That being said, I will be supporting a NO vote on Prop 22 in my upcoming voter guide.
To answer Dan’s question, based on my decade of statewide involvement fighting redevelopment abuses, I would call it a slush fund.
To read Dan’s entire article simply click on the following link:
Larry Gilbert, O.C. Co-Director, Californians United for Redevelopment Education
Larry,
They stole this money fair and square, and there is no attempt to investigate or enforce the uses and abuses of redevelopment.
Redevelopment is no more than a money laundering scheme to divert money from the state to local redevelopment agencies.
I’d guess that a handful of cities use the money very effectively, but the vast majority of the money goes to crony capitalism of one sort or another, or schemes to move money through a series of conduits into the city’s general fund.
Redevelopment Agencies are destroying capitalism. The developers and large corporations are demanding subsidies, rebates, land you name it, from our state, county and city redevelopment agencies or they will go to another area that will.
The property values of these acquired redevelopment properties are frozen at their original sale price and any increase in value, the tax increment, is put back into the redevelopment agency. The state, county and local taxes which go into general funds are frozen. To compound matters the areas in redevelopment are perpetually renewed into redevelopment, they never leave the redevelopment agencies. This means property values are frozen at thirty or more years old levels for property tax purposes, diminishing general fund revenues to pay for public services.
Redevelopment serves to launder public monies into campaign funds, it is the worst kind of public financing.
GG Voter.
Check out my latest post on abandoned sports stadiums