The Morning Report
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Assemblyman Nathan Fletcher brokered a deal that brought a big share of $6 billion in future property taxes to downtown San Diego. As we reported Thursday evening, in the hours before the local Republican’s bill passed the legislature, he and Mayor Jerry Sanders’ office decided explicitly to make the state pay for any money city schools might not get because of his legislation.
Our story didn’t say schools lost money in the deal. They didn’t. The story was about who paid the schools’ tab.
Fletcher goes one step further. He argues that schools actually made out better through the legislation.
“This was a win for education,” Fletcher said. “I would have had great concern if there had been an argument that somehow education was going to lose out of this arrangement.”
Here’s how his argument works.
Redevelopment siphons property tax dollars away from schools and other local governments to benefit rundown neighborhoods. But the California constitution requires the state to make up any money schools might lose through the deal.
Further, downtown San Diego pays a certain percentage of its property tax revenues to schools each year. This year the figure for the San Diego Unified School district was 4 percent, and it’s scheduled to more than triple once a development threshold is reached in the next year or two. That would continue for as long as downtown redevelopment exists — including the extra years Fletcher’s bill effectively granted.
Since the state must pay for schools and they receive additional dollars from downtown redevelopment, schools make out better, Fletcher said.
“The action we did meant more money for San Diego schools,” he said.
Friday afternoon, Fletcher’s office issued a press release estimating that once the higher threshold is met San Diego Unified will receive “well above $15 million” more in 2013 than without redevelopment.
His logic checks out with a San Diego education leader.
San Diego Unified school board President Richard Barrera said in an interview the dollars the district receives from the agency is in addition to the money the state is required to pay. In short, San Diego schools make out better.
“I think that’s a fair argument,” Barrera said.
Further, Barrera said the district likes downtown redevelopment money because it comes contractually guaranteed.
(A spokesman for the downtown redevelopment agency, the Centre City Development Corp., said he believed the money it paid schools was in addition to the state requirements, as well.)
Still, there are some caveats. In the past, money San Diego Unified receives from downtown redevelopment only has been spent in and around downtown and for certain capital and maintenance efforts, Barrera said.
Barrera added the school district didn’t take a position on Fletcher’s bill when it passed in October because it didn’t care where it got its money. It was coming to the district either way.
Now, however, the political landscape has changed. Gov. Jerry Brown wants to eliminate redevelopment agencies because he doesn’t believe the state can continue to subsidize development when schools need money. Brown has positioned his deal as a better one for schools, saying he could direct some of the expected savings from axing redevelopment to burnish education funding.
Barrera said he’s sympathetic to the governor’s proposal, but wants to see something on paper from Brown’s office.
“It looks really promising,” Barrera said. “What we haven’t been able to do is crunch the numbers.”
Not surprisingly, Fletcher doesn’t buy Brown’s argument. He called the governor’s stance “a clever political move,” but also “a false choice.” The state always can cut from somewhere else in its budget to find the schools’ money it needs, he said.
“We can honor our commitment to schools and our commitment to local governments at the same time,” Fletcher said.