Gov. Jerry Brown’s plan to eliminate redevelopment has sent billions of tax dollars flying all over the state — a six-week frenzy with decades of implications. Here are four signposts to keep track of where things stand now.
1. Your Move, Governor
Thursday’s news that San Diego Mayor Jerry Sanders is trying to commit $4 billion toward redevelopment projects over the next four decades puts San Diego at the front of the escalating statewide contest pitting cities against the governor.
Brown started the fight. At stake is hundreds of billions in future property tax dollars. Redevelopment funnels that money away from schools and other local governments to improve rundown neighborhoods. The California constitution requires the state to pay the money redevelopment takes away from schools. The governor figures he can save the state $1.7 billion this year if redevelopment goes away.
But Brown also said he’ll honor existing redevelopment debt. Cities have ratcheted up the fight by trying to pile on as much debt as possible.
No one is playing this game to the same degree as Sanders. The mayor’s proposal is nearly four times larger than any other California city’s. The intent is clear. A Sanders spokeswoman told the Union-Tribune Thursday that if the mayor’s plan worked, the state wouldn’t get the money it’s counting on from killing redevelopment.
It’s the governor’s turn now.
2. Let’s See the Bill
Right now, the governor has put little on paper about his plans, certainly nothing close to resembling actual legislation to eliminate redevelopment.
As we’ve noted before, serious and thorny questions exist. How will Wall Street feel about the millions in redevelopment bonds they own being transferred to a yet unnamed “successor agency” potentially without any bond rating?
And are all the new agreements signed by redevelopment agencies in the last month to sequester billions in property taxes valid or will Brown or someone else sue to nullify them?
San Diego City Attorney Jan Goldsmith wondered in an interview who would own and maintain all the properties that redevelopment agencies have around the state.
Goldsmith, a former state legislator, is helping to prepare the city’s $4 billion proposal. He expected little information from Sacramento.
“They have something up their sleeve,” Goldsmith said. “We are in the dark. Every city and county that’s trying to deal with this is shooting in the dark. We do the best we can.”
Answers to these questions might become clearer whenever the governor releases his proposal.
3. Let’s Make A Deal
Lost in the rhetoric is any hint of a compromise between the state and cities, though it appears one might be possible. Many following the debate believe that Proposition 22, a ballot measure passed in November that prohibited the state from taking redevelopment dollars, led to Brown’s all-or-nothing stance. If Prop. 22 didn’t exist, it would be easier for the state to make up its shortfall without eliminating redevelopment altogether. Redevelopment boosters, who pushed for Prop. 22, aren’t amused.
“Proposition 22 said we can’t rob redevelopment agencies anymore, but now the state is saying it is OK to rob them if we kill them first,” redevelopment lawyer Murray Kane told the Los Angeles Times. “They actually think murder is a loophole for larceny.”
Sanders believes there could be room for both sides to give. He said in a statement he’s working on a redevelopment “reform proposal” with other big city mayors, “that helps the state address its budget shortfall without short-circuiting plans to improve public infrastructure, fund affordable housing and create jobs.”
4. How ‘Hundreds of Millions’ Became $4 Billion in 72 Hours
Sanders’ office has been talking about a big redevelopment play for a few weeks. But the numbers’ evolution over 72 hours this week provides no better example of how quickly people are deciding the fate of billions in property tax dollars.
On Monday, I asked Sanders’ chief deputy Jay Goldstone if the mayor’s redevelopment proposal would be as large as the $1 billion the city of Los Angeles had introduced last month. Here’s his response:
We’re still trying to finalize the list of projects. But it’s not going to be, obviously, as large as Los Angeles. But it’s going to be many of the projects that again we’ve been working on by project areas over the years. I would see it being hundreds of millions. (emphasis added)
Three days later, we found out Goldstone was wrong. Sanders’ plan is four times bigger than what L.A. proposed.