Governor Brown’s proposal to eliminate redevelopment will be voted on soon by the Legislature. We continue to work with our clients and many coalition partners to save redevelopment—California’s largest and most successful economic development and affordable housing program. We want to share with you our key talking points on redevelopment’s benefits and why the proposed legislation is risky, flawed and costly. Like Humpty Dumpty, redevelopment cannot be put together again if eliminated on July 1, 2011.
Please urge your Legislators to remove the elimination of redevelopment from the budget bill and refer redevelopment’s future to a Joint Legislative Committee for thoughtful reform.
Let’s make a difference,
All of us at Seifel Consulting
Overview of Redevelopment Benefits
As a critical engine for economic growth and sustainable development in California, redevelopment:
- Annually generates hundreds of thousands of jobs and puts Californians to work at a time when our State’s unemployment rate is over 12 percent.
- Contributes $40 billion annually to California’s economy and generates more than $2 billion annually in state and local tax revenue.
- Revitalizes blighted areas and catalyzes economic vitality by creating jobs, funding affordable housing, building public infrastructure improvements, and creating commercial opportunities.
- Is a critical affordable housing program—since 1993, it has built or rehabilitated nearly 100,000 affordable housing units—helping local governments meet their housing needs.
- Provides key tools to reclaim brownfield sites and stimulate infill development as opposed to sprawl.
Constitutional Defects of Proposed Legislation
- Violates Article XIII, Section 25.5 (Proposition 22), which prohibits transfer of tax increment to the State, any agency of the State, or any local jurisdiction.
- Violates Article XVI, Section 16 of the California Constitution, which established tax increment financing and requires tax increment to be paid to redevelopment agencies.
- Violates Article XIII A, Section 1, which requires property taxes to be collected and distributed to the local districts within each county.
- Violates federal and state provisions prohibiting the impairment of existing contractual obligations.
Serious Flaws
- Potentially violates existing contracts by substituting “successor agency” for redevelopment agency without parties’ agreement.
- Likely violates collective bargaining agreements covering public sector employees.
Lack of Accountability and Increased Bureaucratic Costs
- Creates confusion regarding responsibility for managing redevelopment agency obligations.
- Creates unelected and unaccountable Oversight Boards with inherent conflicts of interest.
- Presents significant risks for fraud, mismanagement and litigation.
- Creates potentially massive costs for dissolution of redevelopment agencies and creation of successor agencies.
- Imposes significant unfunded state mandates on counties by shifting responsibilities to counties.
- Increases potential liability of County Auditor-Controllers related to disputes over their decisions and determinations.
Poor Public Policy—Eliminates Key Tool for Housing and Economic Development
- Obliterates long-established investment tool, creating a cloud over all local government financing.
- Eliminates California’s largest and most successful housing and economic development program.
- Short-circuits thoughtful, statewide discussion on redevelopment tools and reform.
Like Humpty Dumpty, redevelopment cannot be put together again if eliminated on July 1.