Capitol Ponders Post-Redevelopment World

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Senate President pro Tem Darrell Steinberg told reporters this morning that he's not closing the door on pleas to postpone the dissolution of local redevelopment agencies.

But let's admit it: the door is on one of those automatic arms that closes by itself, and Steinberg isn't jumping up to prop it open.

As such, the conversation inside the state Capitol is likely soon to turn to what California's post-redevelopment world will look like... and Steinberg is cooking up an interesting idea.

Last month's California Supreme Court ruling means the life support for more than 400 local RDAs gets unplugged on February 2. The case, as was widely reported, was really a high stakes gamble to undo the 2011 budget provision that would have allowed allowing redevelopment agencies to only stay alive through an expanded sharing of property tax dollars with schools and counties.

Now, left with only extinction, RDA supporters are pleading for help. This morning, Sen. Alex Padilla (D-LA) said that he's introducing a bill to delay the closing the door on RDAs for more than two months, and similar rumblings were heard last week.

But the leader of Padilla's Democratic caucus seems to be already -- politely -- saying no.

"It's problematic," said Senate leader Steinberg of Padilla's proposal during a wide-ranging chat with reporters. In particular, he said that a delay of RDA shutdowns would mean local schools would miss out on a portion of property taxes that will be redirected from the shuttered agencies.

The Senate pro Tem said, though, that protecting one function of RDAs is likely to get support: affordable housing. Steinberg has a bill to allow dollars already earmarked for low and moderate income housing, perhaps as much as $2 billion, to remain in place.

But on the broader issue, he suggested it's time to think differently about local economic development, echoing a point made by Assembly Speaker John Perez in an interview last week.

Steinberg's idea is one that would combine two of his long-sought changes to local communities: more regional tax sharing and more "sustainable" development.

A decade ago, then Assemblymember Steinberg pushed legislation to require sales tax sharing between governments in the Sacramento region -- a pilot program of sorts to keep cash-starved local governments from battling over projects like big box stores. AB 680 ultimately died without a final vote.

In 2008, the Sacramento Democrat had better luck with a different local development measure, SB 375. The legislation signed into law by Governor Arnold Schwarzenegger sought to (among other things) encourage local officials to stop suburban sprawl and make development plans that are, as the bill calls them, more "sustainable." Much of that law, most notably the greenhouse gas reduction element, is still in the process of being fully implemented.

So Steinberg's pitch seems to be this: if locals agree to more of these kinds of development and regional strategies, then they should get money from the liquidation of redevelopment agency assets --buildings, parking lots, you name it.

"I would be willing to offer that money back to local governments," Steinberg said, "if the local governments use those tools to promote economic development consistent with SB 375," and if they "adopted some real elements of fiscal reform," including sales tax sharing similar to his 2001 plan in AB 680.

The Senate leader admitted today that his plan isn't fully cooked. He says his staff is still researching the statewide dollar value of those RDA assets, but believes it's significant. He's also unsure whether the cash would be collected in one statewide pot and divvied up, or remain in the communities in which the RDAs used to exist.

Locals may balk at parts of the plan and, as with so many things, challenge its validity in court. But there seem to be two big takeaways from both today's chat with Senate pro Tem Steinberg and last week's chat with Assembly Speaker Perez.

The first is how much longer the Capitol discussion can remain focused on keeping RDAs alive. Leaders in cities across the state -- Los Angeles, Oakland and Santa Rosa but to name a few -- are all starting to comply with the RDA shutdown and time is running out.

But secondly, and probably more importantly, can consensus in Sacramento be reached on a post-redevelopment proposal? There's still a lot of acrimony from the way the RDA fight went down, and it's merely the latest chapter in years of fighting between local and state forces about a dwindling supply of tax dollars and how to spend them.

This time, the upper hand would seem to be held by the Legislature. No longer is it a debate about what cities and other local entities will allow Sacramento officials to do. Now, a major use of tax dollars will be scrapped -- and the door will be closed -- all on its own. And locals likely can only open that door back up with the Legislature's permission.

As Senator Steinberg put it this morning, "the power dynamic has changed here."

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About John Myers

John Myers is senior editor of KQED's new multimedia California Politics & Government Desk.  He has covered California politics for most of the past two decades -- serving previously as Sacramento bureau chief for KQED News and, most recently, as political editor for KXTV News10 (ABC) in Sacramento. He moderated the only gubernatorial debate of 2014, and was named one of the nation's top statehouse reporters by The Washington Post. Follow him on Twitter @johnmyers.
  • Sylvia Robles

    The City of Grand Terrace was approved by LAFCO in absence of any finding that the revenue base could support a city. The city just passed the 33 year mark. Obviously the city needs consideration to keep a higher share of the property tax base to provide core municipal services. Unfortunately, the council took the same gamble as other cities with RDA lawsuit and we lost the gamble.  But we do need consideration for getting out of crony capitalism business and keeping police, fire and parks functioning. It is still a better and more prudent fiscal path. The city incrementally made the entire middle class city an RDA.  The examples of blight were down-right hilarious, if taking money from hardworking property owners can be in reality funny, instead of downright wrong.

  • Charlene

    Finally some fiscal responsibility! Thanks to Jerry Brown for killing the RDA’s. As for “affordable” housing, they can’t even define it, how can they build it? Another big mystery is why Jerry favors the High Speed Rail project. Most of us will be dead before that system is operating and the cost will far exceed the current estimate. Worse yet, once it is built it will require massive government subsidy to operate.

  • Anonymous

    The Legislature should stay well out of this.  The disposition of RDA assets, in AB 26, is actually extremely intelligent.  Hard assets (police stations, etc.) may be transferred to municipalities.  Liquid assets revert proportionally to the underlying local services (predominantly schools, but also cities, counties, fire and other special districts) — who will be paying for them for the next 20 years.

    The most significant assets held by RDAs today is the left-over cash from their last bond financing.  Since RDA debt is now at $30 billion — funded by a significant portion of the RDA property tax stream of $6 billion —  it is reasonable to estimate that at least $8 billion is sitting there in cash.  Handing that cash back to the cities is just reinventing RDAs, while continuing to rob schools. 

  • Rick Abrams

    We’ve had Tea Partiers  and now the time for the Left to attack with the Coffee Grinders — we are alert and will grind down these crooks.

    No more CRA —  Not one extra second!!!

  • Sylrobles

    RDA’s must stay on current course to complete closure. Already on Twitter, my local paper is posting stories with headlines misleading public. We must keep re-stating the fact that voters can vote for General Obligation Bonds to fund any important urban renewal projects. Electeds that continue to push RDA legislation should be held suspect. Local control and transparency must rule. Why should we trust any entity-actually government cartel- that has obligated 30 percent of property taxes in The County of San Bernardino at the expense if it’s citizens. Riverside spent 26 percent.

    Pro biz if we have $8 billion with RDA gone why do we need a $7 billion temporary tax? I hope we do not need one. Also, Colton Unified School District claims they will get zero dollars as result of RDA shutdown.

  • Guest

    You are misinformed on HSR, take some time to understand how vested oil, auto and airline interests are spreading propaganda against it, then you will begin to understand why our wise governor supports it…here is a link with some credible info:

  • Rick Abrams

    Lots of union jobs to build the rails and lots of union workers to operate transit make these rapid and mass transit projects luring to Dems.  They also lure GOP developers — i.e. the 1%.

    Do they help transportation?  Probably not, but then the CRA was not about building anything we needed.  It was about funneling cash to the 1% — so too these Green Projects — their function is to funnel tax payer money to the 1%.

    While both transportation and Green are good in the abstract, for the most part, they have been come Buzz Words for what we used to call, thievery, graft, bribery, money laundering.

  • Rick Abrams

    Let’s also remember that the CRA and any new CRA type agency will have Kelo eminent domain powers.  Kelo v City of New London, US Supreme Court case, 545 U.S. 469 (2005), allows a corrupt city council — not to imply that the Los Angeles City Council was corrupt and competent to its very core — to take any piece of property and give it to any corrupt backer of a city councilmember (or contributor to the councilmember’s off-shore bank account).

    Next the city council, which has final approval on all the CRA contracts and projects, then votes to give the councilman’s buddy several millions tax payer dollars.  For example, the LA City council gave $52 Million to billionaire Eli Broad so he could have a parking garage next to his art museum.  The only thing that was blighted was Eli’s soul.

    Yes, Sylvia, you are 100% correct.  We need to end “crony capitalism” because it is not capitalism — it’s just thievery.