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Jerry Brown's Plan To End Redevelopment In California Wrong-Headed

California Governor Jerry Brown is known for attacking sacred cows but sometimes he does so without a clear vision of the real objective and how to achieve it. Such is the case with California Redevelopment Agencies (CRAs), which Brown wants to do away with as part of his State of California Proposed Budget.

Governor Brown thinks the move will return $1.7 billion to the general funds of California cities; but such a claim shows Brown doesn't understand Redevelopment, how it works, and what it's supposed to do.  The real objective of returning $1.7 billion will not be done in the way he says, and for several reasons.

First, California Redevelopment is designed such that it allows cities to establish redevelopment areas to keep property taxes. And contrary to popular view, redevelopment revenues from project areas can be used to provide services in those project areas. Many cities have done this, including Oakland.

Indeed, California Redevelopment Law was used by the City of Santa Ana to keep all of its property tax revenue. And while the law was changed to prevent that action by other cities, the City of Santa Ana's example proves that Redevelopment itself keeps property tax revenue under civic, and not state and county share, control. Yes, counties hate CRA's because they keep city property tax revenues from county collection and use. But counties can and do negotiate "pass-through" agreements to get some of that CRA prop tax revenue.

The bottom line is Governor Brown's wrong here and doesn't "get" how Redevelopment works.  The truth is that cities use California Redevelopment to keep property tax revenue and can use it for services.

Second, such a proposal as Brown's brings out every wingnut who has an issue with Redevelopment jumping on the Brown bandwagon, bringing up issues that can be easily fixed with a tweak in the law. For example, many suburban cities don't use their affordable housing set-aside monies. They should be forced to give 50 percent of those funds to a total pool that's then redistributed to the CRAs that have the greatest predetermined need.

Third, if Governor Brown really wants to attack a sacred cow and solve this budget problem, go after Prop 13.

Proposition 13 got us into this mess by throwing an intergenerational choke-chain around California's revenue collection system in 1978. Now, the near-depression recession we faced added another choke chain California has to deal with. The state has too many people chasing too few resources. The only way to reduce the population and increase the resources is by a three-percent increase in property taxes state-wide.

It would present a brutal and ugly fight. Hell, it might cost Brown his job and he'd have the shortest executive career since that pope who got poisoned, but it would be worth doing to really get at the actual problem plaguing California today: it's property tax system.

Be brave Jerry. Do it.

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