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We appreciate the opportunity to respond to the Fact Check. I said that this deal was good for San Diego because it means more tax dollars will remain in the city. Our recent effort to eliminate the financial cap for the Centre City Redevelopment Area is a great thing for San Diego. I’m proud of this accomplishment. It will create over 100,000 jobs and countless economic development opportunities in our region for years to come.
We can understand the confusion surrounding the technical details — the law is really complicated. However, it is a completely true statement to say the choice was to keep more money in San Diego or send it to Sacramento — a fact corroborated by the analysis of this measure.
To be fair, this is a complex issue. It is complicated and many have confused the facts. Most simply put, by lifting the cap, San Diego will have more money and Sacramento will have less. Unfortunately, this issue is complicated enough that someone can twist words and facts to reach a pre-determined outcome.
As we’ve stated all along, California’s government is broken. Nowhere is this more evident than in how property tax dollars are collected and redistributed to cities, counties, schools, and special districts (e.g. hospital or park districts). Property taxes are assessed locally, collected locally, and redistributed locally — except for the fact that the state sets the rules on how all this happens. Who gets what money and when is determined by Sacramento — not San Diego.
Court decisions, propositions, legislation, and continual state budget problems have created a really complex process. Every year that goes by, this arrangement becomes more convoluted. Over the course of the last thirty years, tracking how dollars are collected and redistributed has become a lawyer’s dream and a taxpayer’s nightmare.
There have been numerous instances where the California Legislature has changed the rules and made the flow chart even more difficult to understand. A simple graph can show where property tax dollars ultimately end up, but that doesn’t explain who sets the rules (Sacramento) or who controls the process (Sacramento) or the greater tax distribution system. It’s more complex than that.
For instance, the property tax dollars that go to schools are also counted by the state toward its obligations for school funding under Proposition 98. Does this mean that property taxes go to the state and then are sent to schools? Not literally, but for the state’s accounting purposes — yes. In a related example, take ERAF — the Education Realignment Augmentation Fund. In the early 1990s the state was broke. Part of their budget solution was to take more property taxes from cities and counties and give it to schools. This saved the state money and hurt local government. ERAF allowed the state to reduce how much money it gave to schools by enacting a complicated property tax shift.
As you can see, the explanation is not black and white. Sure, some tax dollars may end up in San Diego, but not until they get sent through this complex accounting maze. This example and many others have made it nearly impossible to follow where our tax dollars go. People pay their taxes then have no idea where the money goes.
To fully explain the technical details of our effort and how redevelopment law and local government financing meld is a mind-boggling exercise. It is important to understand how it works. Perhaps a long explanation of the technical details of property tax law may be warranted, but that should not obfuscate the greater point. This effort will bring more tax dollars to San Diego.
The facts are clear — more tax dollars will end up in San Diego and will go toward creating jobs and spurring economic development. A bipartisan group of legislators from the San Diego region did just what the voters elected them to do — create jobs. Now is the time to move forward. Let’s start creating the jobs this action promises.
Assemblyman Nathan Fletcher represents California’s 75th District. He lives in San Diego.