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Michael Hiltzik: Brinksmanship over redevelopment

January 29, 2011 |  4:58 pm

The starkest example this year of political leaders insisting on being part of the problem, not the solution, doesn't come from Congress, as expected, but rather from here in California, where redevelopment agencies across the state delivered a message to Gov. Brown that can't be printed in a family newspaper.

As my Sunday column reports, Brown has proposed abolishing municipal redevelopment agencies, which ostensibly concern themselves with eradicating blight. In the process they've laid claim to $5 billion a year in property taxes, much of which is consequently withheld from counties and school districts.

Taxpayers at the state level have to make up a lot of the difference, which would be fine if there were any evidence that the redevelopment bodies have actually produced a net gain in real estate values or employment statewide. Here's how much empirical evidence has been produced over the last seven decades: zilch.

It's possible that Brown's death sentence for the municipal agencies (which would have to be passed by the Legislature) is merely an opening gambit. If the redevelopment lobby agrees to pass through more of their $5 billion to local districts, that would represent compromise.

So far, they're hanging tough. Several responded to Brown's proposal by tying up millions in unallocated redevelopment funds, so the state can't reach them--in the city of Los Angeles, the total came to nearly $1 billion. In the words of Jean Ross, head of the California Budget Project: "For them to lock down that money is like their saying, 'We're not willing to be part of a solution'" to the state budsget crisis.

The agencies insist that Brown's plan to redistribute their property tax revenue is unconstitutional and violates Proposition 22, passed last year by the voters to prevent the state from closing its budget gap with local funds. They say Brown's plan is tantamount to "abolishing redevelopment."

This position isn't going to make legislators happy. "They're not being constructive about alternatives," said state Sen. Lois Wolk (D-Davis), a former mayor and redevelopment official and chairwoman of the new Senate Committee on Governance and Finance. "They're just ginning up hysteria."

The column begins below.

Nobody expected Gov. Jerry Brown's first budget to be a painless affair, not least because he announced in advance that it would be ugly. 

What was surprising, however, was the first ox he chose to gore.

It turned out to be redevelopment agencies. Maybe you're not familiar with this odd corner of government, but you should be. 

That's because local government redevelopment agencies lay claim every year to about $5 billion in property taxes that would otherwise go to school districts, counties and the state. But they've never had to show they're worth the money. In fact, they've never had to show that their efforts produce any measurable net gain in property values or employment in the state, which is the whole point of having them in the first place.

Those squeals of agony you hear? That’s the redevelopment lobby facing its own mortality.

Read the whole column.

-- Michael Hiltzik