More than anything else, Gov. Jerry Brown’s proposal to eliminate redevelopment statewide has laid bare governments’ rapaciousness for the giant but finite pool of property taxes that helps pay for many major government services.
In San Diego, billions in tax dollars have been flying around in the space of weeks. Now, an unexpected new player has arrived with its hand out, too.
On Monday, San Diego’s City Council approved Mayor Jerry Sanders’ plan for more than $4 billion in redevelopment spending — four times what any other city around the state has tried — in an effort to evade Brown’s axe. The San Diego Unified School District, which relies on property taxes to fund much of its $1.2 billion budget, also made a daring move Monday to grab city money to fill its budget gap. The school district wants the city to advance it $64 million from redevelopment funds.
“The initial reaction of people around the city is, ‘We aren’t responsible for schools, so why should we fund them?’ The answer is now you can,” school board President Richard Barrera said in an interview. “You now have a responsibility to help schools especially in a time of real financial need.”
Redevelopment siphons property taxes away from schools, counties, cities and other local governments to improve rundown neighborhoods. Brown argues that the state cannot subsidize development at a time when schools and other core government services need money. But redevelopment backers argue that the process allows for job creation and stimulating growth that wouldn’t happen otherwise.
Brown has said he would honor existing redevelopment debts if redevelopment goes away. The council’s decision Monday was an attempt to make city redevelopment plans over the next 40 years permanent. It’s unclear at best if Monday’s action will hold up if Brown succeeds, but city officials said the action was necessary to protect the money.
The governor’s plan, Barrera said, has put the focus on the need for greater schools funding — San Diego Unified faces a $120 million deficit. Even though Monday’s action had no effect on the dollars received by the district, Barrera and other school supporters came in droves to ask the city for extra cash.
The district wants $64 million that it expects to receive from the city’s downtown redevelopment agency through a property tax sharing agreement from 2018 to 2020.
Barrera said he’s been negotiating a deal with Sanders’ office for a couple weeks, but the talks’ slow pace frustrated him. City Chief Operating Officer Jay Goldstone said he didn’t know why discussions between the two sides broke down and that the Mayor’s Office doesn’t yet have a position on the district’s proposal.
The move went nowhere Monday as any decision wouldn’t have met public noticing requirements. But City Council President Tony Young, who would have to schedule a discussion, was lukewarm at best on the proposal. He said the district needed to make greater fiscal reforms beforehand.
“Then we might be able to talk about fronting you some additional dollars,” Young said.
The Centre City Development Corp., the downtown redevelopment agency, was much stronger in its opposition. Money to pay the schools would have to come from the $216.9 million the agency has allocated for parks, fire stations and neighborhood improvements and would delay their implementation for years.
“We worry that this could be a short-term approach with long-lasting implications,” CCDC chairman Kim John Kilkenny said in a statement.
The school district’s proposal — reaching for money that wouldn’t be theirs for another seven years — is more aggressive than City Council has been in filling its own day-to-day budget deficit with redevelopment dollars.
The city’s budget shortfall is $56.7 million, and for three months council members have pushed to have CCDC take over annual bond payments for the existing Convention Center expansion to lessen the deficit.
Shifting the payment, now $9.2 million annually, from the day-to-day budget to the downtown agency is legally dicey, and faces stiff resistance from downtown redevelopment backers.
Council members made small headway on that issue Monday. Needing Councilman Carl DeMaio’s vote to pass the $4 billion redevelopment plan, the Mayor’s Office agreed to put shifting the Convention Center bond payment on the council agenda within a month.
The council approved the $4 billion plan 5-2 with Councilwoman Sherri Lightner and Councilman David Alvarez voting no. Councilwoman Marti Emerald was absent.
Staff writer Emily Alpert contributed to this story. Please contact Liam Dillon directly at liam.dillon@voiceofsandiego.org or 619.550.5663 and follow him on Twitter: twitter.com/dillonliam.