Just before the City Council is expected to make a key decision in the push to increase the maximum amount of money downtown’s redevelopment agency is allowed to raise, a new report says the decision to lift the current cap may have a positive impact on the city’s day-to-day budget.

In April, Independent Budget Analyst Andrea Tevlin said the city’s general fund, which pays for day-to-day services like parks, libraries, and fire stations, stood to lose $300 million in property tax revenue if the city lifts a cap on how much the Centre City Development Corp. can collect and spend.

A portion of the property taxes captured by the redevelopment agency downtown would otherwise go to fund the city’s day-to-day budget once the agency reaches its $3 billion limit.

Tevlin’s initial report raised concerns that lifting the cap would keep money downtown at the expense of funding services in other neighborhoods.

But the report did not consider how potential gains from sales and hotel taxes generated by new downtown development might offset that number.

On Friday, Tevlin released a new report that seemed to turn its previous analysis on its head. The report considered the amount of revenue the city could gain from sales and hotel tax revenue. But the new analysis is not a sure thing.

Estimates for new sales and hotel tax revenue are difficult to make. They depend on projections for how much new development will occur over several years and expected increases in downtown property values.

But those projections are never certain.

The report said, for example, that it was unclear whether the hotel and sales tax revenue would be brand new revenue, or just money diverted downtown from other parts of the city.

“There will likely be some incremental growth in revenues, but trying to quantify it right now is fraught with uncertainty,” said Erik Bruvold, president of the National University System Institute for Policy Research.

The IBA report said a more in-depth study was needed to better determine the fiscal impacts of raising CCDC’s cap. On Tuesday, the City Council will decide whether to spend $500,000 to fund that study.

— ADRIAN FLORIDO

Dagny Salas

Dagny Salas was web editor at Voice of San Diego from 2010 to 2013. She was an investigative fellow at VOSD from 2009 to 2010.

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