News
SACRAMENTO — California's budget for the new fiscal year includes major changes to community redevelopment agencies, which Gov. Jerry Brown and others have criticized as being little more than slush funds for private developers that drain tax money away from schools and public safety.
But in Grass Valley, redevelopment funds have been used to beautify the Gold Rush-era downtown, rehabilitate low-income public and private housing, and make aging business districts appear more attractive.
Through the city Redevelopment Agency, officials also have been able to sock away more than $5 million toward the construction of a freeway interchange on Highway 20/49 at Dorsey Drive.
“Small cities like ours depend on those dollars to work with,” said Grass Valley Mayor Janet Arbuckle, who has visited legislators in Sacramento urging support for the program.
Brown's change would save the state $1.7 billion in the new fiscal year by forcing redevelopment agencies to shift some money, originally intended to fight blight and improve housing and business areas, instead to school districts and local governments.
That is, if the change is allowed to stand.
Cities and redevelopment agencies this week pledged to file a lawsuit, saying the Legislature acted illegally when it approved a pair of bills to eliminate the agencies and require them to make additional payments to schools if they want to continue operating.
Grass Valley has been supporting a statewide association fighting the bills, but it was unclear Thursday whether the city would participate in legal action.
The plan “holds cities hostage,” Arbuckle said.
By Aug. 1, cities would be told what their share is going to be if they want to keep their redevelopment agencies, Arbuckle said. They would have until Nov. 1 to decide what to do, she added.
But that also means schools and counties won't have access to that money until long after the school or fiscal year starts.
“And if the (city's) share is too high, it would be forced to shut down its redevelopment, and then nothing would go to the schools,” Arbuckle said. “All that money ... would be channeled to the state.”
Redevelopment supporters point to Proposition 22, a ballot initiative passed last fall that prohibits the state from further raids on transportation, redevelopment and local government money.
Redevelopment agencies are one of the few vehicles promoting construction and jobs at a time when California is still reeling from the effects of the recession, said California Redevelopment Association Executive Director John Shirey. Unemployment statewide remains above 11 percent, and was at 11 percent in Nevada County in May.
Senate President Pro Tem Darrell Steinberg and Assembly Speaker John Perez said they felt confident the two bills, ABx1-26 and ABx1-27, would be upheld if challenged.
“We're confident that it's legal and we're confident that reform is necessary,” Perez said after lawmakers passed the budget package late Tuesday.
Redevelopment funds come from property taxes within districts declared by cities to be redevelopment areas — as in the case of downtown or Glenbrook Basin in Grass Valley. As funds are spent in the area, incrementally higher property taxes that result from improvements go back into the fund.
Cities can use that money in more flexible ways than general fund money, including landing grants and partnering with private entities to do more than they might have on their own, Grass Valley Community Development Director Joe Heckel has said.
The first redevelopment agencies in the state were established 60 years ago to combat urban blight, but they have since evolved into complex agencies that dabble in affordable housing, infrastructure projects and commercial development, often with mixed success.
Brown proposed phasing out the state's approximately 400 agencies as a way to trim government and free up more money for education, public safety and other essential services.
“It is a matter of hard choices, and I come down on the side of those who believe that core functions of government must be funded first,” Brown said in January.
Opponents of redevelopment agencies have pointed to questionable projects. Two former officials of the Southeastern Economic Development Corp., a San Diego redevelopment agency, were charged recently with approving lavish bonuses and salary increases for themselves and other employees without approval.
But in Grass Valley, redevelopment funds have been used to beautify the Gold Rush-era downtown, rehabilitate low-income public and private housing, and make aging business districts appear more attractive.
Through the city Redevelopment Agency, officials also have been able to sock away more than $5 million toward the construction of a freeway interchange on Highway 20/49 at Dorsey Drive.
“Small cities like ours depend on those dollars to work with,” said Grass Valley Mayor Janet Arbuckle, who has visited legislators in Sacramento urging support for the program.
Brown's change would save the state $1.7 billion in the new fiscal year by forcing redevelopment agencies to shift some money, originally intended to fight blight and improve housing and business areas, instead to school districts and local governments.
That is, if the change is allowed to stand.
Cities and redevelopment agencies this week pledged to file a lawsuit, saying the Legislature acted illegally when it approved a pair of bills to eliminate the agencies and require them to make additional payments to schools if they want to continue operating.
Grass Valley has been supporting a statewide association fighting the bills, but it was unclear Thursday whether the city would participate in legal action.
The plan “holds cities hostage,” Arbuckle said.
By Aug. 1, cities would be told what their share is going to be if they want to keep their redevelopment agencies, Arbuckle said. They would have until Nov. 1 to decide what to do, she added.
But that also means schools and counties won't have access to that money until long after the school or fiscal year starts.
“And if the (city's) share is too high, it would be forced to shut down its redevelopment, and then nothing would go to the schools,” Arbuckle said. “All that money ... would be channeled to the state.”
Redevelopment supporters point to Proposition 22, a ballot initiative passed last fall that prohibits the state from further raids on transportation, redevelopment and local government money.
Redevelopment agencies are one of the few vehicles promoting construction and jobs at a time when California is still reeling from the effects of the recession, said California Redevelopment Association Executive Director John Shirey. Unemployment statewide remains above 11 percent, and was at 11 percent in Nevada County in May.
Senate President Pro Tem Darrell Steinberg and Assembly Speaker John Perez said they felt confident the two bills, ABx1-26 and ABx1-27, would be upheld if challenged.
“We're confident that it's legal and we're confident that reform is necessary,” Perez said after lawmakers passed the budget package late Tuesday.
Redevelopment funds come from property taxes within districts declared by cities to be redevelopment areas — as in the case of downtown or Glenbrook Basin in Grass Valley. As funds are spent in the area, incrementally higher property taxes that result from improvements go back into the fund.
Cities can use that money in more flexible ways than general fund money, including landing grants and partnering with private entities to do more than they might have on their own, Grass Valley Community Development Director Joe Heckel has said.
The first redevelopment agencies in the state were established 60 years ago to combat urban blight, but they have since evolved into complex agencies that dabble in affordable housing, infrastructure projects and commercial development, often with mixed success.
Brown proposed phasing out the state's approximately 400 agencies as a way to trim government and free up more money for education, public safety and other essential services.
“It is a matter of hard choices, and I come down on the side of those who believe that core functions of government must be funded first,” Brown said in January.
Opponents of redevelopment agencies have pointed to questionable projects. Two former officials of the Southeastern Economic Development Corp., a San Diego redevelopment agency, were charged recently with approving lavish bonuses and salary increases for themselves and other employees without approval.
