The Choir Against the RDA Funding Scheme has added voices. Many Citizens of GT have raised concern about how RDA Funds were used and abused in GT and some have said it was time to end the RDA long before the plans of Governor Brown were disclosed. Perhaps it will be difficult, but just perhaps it is the ethical, and right thing to do. Here are some Non GT Voices of the Choir. Perhaps the readers who discount the comments and concerns of the GT Citizens may get their insight from these other sources.
Daniel Borenstein: Brown is right to disband redevelopment agencies
By Daniel Borenstein
Staff columnist Contra Costa Times
Posted: 01/22/2011 09:00:00 PM PST
THE SCREAMS from cities about Gov. Jerry Brown's plans to disband about 400 redevelopment agencies across the state are shameful and hypocritical.
While city officials claim the state is trying to raid their funds, it's actually the cities, using their redevelopment agencies, that have been siphoning billions of dollars from badly needed government services and spending the money on projects that often have little to do with cleaning up blight.
The redevelopment scam, which has turned into a windfall for developers, bond marketers, planning consultants and professional sports teams, has racked up $88 billion in public debt statewide -- without voter approval. It should have been ended decades ago. Kudos to the governor for finally taking it on.
What was presented to voters in the 1950s as a plan to finance new construction in some of the worst slums in the state has morphed into a scheme to indirectly subsidize city budgets. In the East Bay, communities like Oakland, Clayton, San Pablo, Pittsburg, Hercules, Pinole and Emeryville are hogging huge sums of property tax money that should be shared with the county, special districts and schools.
Communities like San Diego and Los Angeles have used the money to fund sports complexes, while Santa Clara is planning to do the same. In Hercules, millions of dollars of redevelopment funds went to consultants who have almost no construction to show for it, Advertisement and to a company owned by the city manager's daughters that, among other things, provided mortgage loans for city employees and a member of the firm.
Indeed, an analysis released in September by a watchdog office of the state Senate found redevelopment agencies around the state that used their money primarily to pay salaries and administrative costs. Worse, a Los Angeles Times investigation published in October found that, "at least 120 municipalities -- nearly one in three with active redevelopment agencies -- spent a combined $700 million in housing funds from 2000 to 2008 without constructing a single new unit ... . Nor did most of them add to the housing stock by rehabilitating existing units.
While advocates claim that redevelopment agencies help bolster the California economy, the nonpartisan state Legislative Analyst's Office reported last week that "there is no reliable evidence that redevelopment projects attract businesses to the state or increase overall economic development in California. The presence of a redevelopment area might shift development from one location to another, but does not significantly increase economic activity statewide.
To be sure, redevelopment has helped produce low- and moderate-income housing in many communities, but at a tremendous cost. If the goal is more affordable housing, a more efficient way must be found. Redevelopment agencies as they are currently constructed and funded are not the answer.
Throughout California, property taxes are usually split among schools, counties, special districts and cities. But when a city forms a redevelopment agency, it can capture all the tax growth from that designated blighted area. Gradually, they have to start sharing some of it again with the other local governments. But most of that money goes to the redevelopment agency and can be leveraged to fund improvements within the area and offset city costs for projects there.
Without the redevelopment agencies, advocates claim, there would be little increase in property values and taxes in those areas. It's a bogus argument. According to a 1998 study by the nonpartisan Public Policy Institute of California, about half of tax increases in redevelopment areas would have happened anyhow.
Thus, redevelopment agencies are collecting money that would have otherwise gone for other critical government services.
Currently, redevelopment agencies capture nearly 12 percent of property tax revenues across the state, or about $5 billion a year.
The single biggest chunk of that money, about $2 billion, would have otherwise gone to schools. But since the state is responsible for funding schools, it's the state that loses that money. That's why the governor is so concerned about redevelopment agencies. With California facing huge cuts in social and health services and the higher education system, it makes no sense for the state to continue subsidizing redevelopment.
Counties are the next big losers, at about $1.4 billion a year -- money that would otherwise go to help provide social services, health care and public protection. Cities lose about $1 billion, but don't look for them to complain because they run most of the redevelopment agencies and subsidize their budgets with some of the money.
Indeed, since the passage of Proposition 13, the 1978 property tax-cutting initiative, cities have rapidly increased their use of redevelopment agencies to grab a bigger portion of the pie.
In 1982-83, redevelopment agencies received 3.6 percent of property tax revenues statewide. Today's it's 11.9 percent.
The distribution is wildly uneven. In Contra Costa and Alameda counties, about 12 percent and 13 percent, respectively, of property tax revenues went to redevelopment agencies in 2008-09, according to the state Controller's Office. Santa Clara and San Mateo counties were below average at 9 percent and 10 percent. But, in San Bernardino County, redevelopment agencies siphoned off 31 percent, followed by Riverside County at 27 percent.
Within Contra Costa, San Pablo's redevelopment agency this year will grab 77 percent of the property taxes collected in that city. Other hogs are Pittsburg (67 percent); Pinole (50 percent); Hercules (37 percent) and Clayton (30 percent). In Alameda County, Union City grabs 25 percent, Oakland siphons off 26 percent and Emeryville captures 77 percent.
With the promised streams of tax revenues as security, redevelopment agencies have borrowed money for their projects. As of 2008-09, they had run up a collective $88 billion in debt, including $35 billion in bonds.
It's an easy way for a local agency to borrow money. Unlike bonds for parkland, school construction or, say, a marina improvement, redevelopment bonds don't require voter approval.
It's time to put an end to all this. Money must be set aside to pay off the debts. But, beyond that, the property tax money should go elsewhere.
Brown is right: California cannot afford its redevelopment agencies.
Daniel Borenstein is a staff columnist and editorial writer.
Reach him at 925-943-8248 or dborenstein@bayareanewsgroup.com.
AND
Montebello's redevelopment loan draws ire from critics
By Bethania Palma Markus, Staff Writer
Posted: 10/03/2010 05:26:23 PM PDT
As Montebello struggles to balance its budget, the city has turned to a big, if somewhat obscure, source of credit - its own redevelopment agency.
Created in the 1940s, redevelopment agencies allow a city to capture property tax and divert it into an account to fix up blighted areas.
Montebello has created a novel use for its agency - using it to fight blight that hasn't happened yet.
When the city recently transferred $19.3 million from its redevelopment agency to its general operating fund, Interim City Manager Peter Cosentini said Montebello would cease to function without the infusion.
"We wouldn't be able to pay our bills and our people and when you get into that position blight will become rampant," he said. "Clearly the agency benefited from it."
The California Health and Safety Code prohibits "paying for employee or contractual services of any local governmental agency," other than for redevelopment purposes.
"I don't feel it's legal," said Assemblyman Chris Norby, R-Brea.
Norby and other redevelopment agency critics argue the agencies' powers are abused by local governments, who they say use the money to do favors for developers and play shell games with public money.
Montebello's justification for using the money was "unheard of," Pasadena-based attorney Chris Sutton said.
The only thing likely to stop Montebello would be a judge's order, which would be triggered by a lawsuit, he said.
Advertisement
"This process is kind of under the radar and until someone gets a court of appeals opinion or the Attorney General's office intervenes they're going to keep doing it," Sutton said. "It's a problem."
To form a redevelopment area, cities must make a finding of blight. Once the existence of blight is established, the city is able to siphon off property tax into an account that is usually controlled by the City Council.
Sutton said cities often skirt the rules.
Pasadena has used redevelopment money to pay police and firefighter pensions while Los Angeles has used funds from its Bunker Hill redevelopment zone for projects outside the project area, he said.
Statewide, redevelopment agencies divert billions of dollars in property tax yearly that would otherwise go to counties, schools and special districts, experts said.
While California is broken up into 58 counties and 478 cities, there were 425 redevelopment agencies as of 2008, according to data from the state controller's office.
In 2008-09, Los Angeles County lost 13.7 percent of property tax revenues that would otherwise go to the county general fund, totalling $428 million.
In 10 years the county lost $2.7 billion to redevelopment agencies, according to county documents.
"There is a concern because it seems to be an ever-growing share of local revenues," said Tom Tyrrell, an attorney for L.A. County. "It's a fiscal stress and there are people who believe it's a very damaging one in light of the already-restricted state of local finance."
If used correctly, redevelopment can benefit communities, said state Sen. Christine Kehoe, D-San Diego.
San Diego used redevelopment money to build Petco Park where the Padres play, sparking millions in subsequent investment, she said. The city also used the funds to revitalize a slum in 10 years, she said, bringing in a library, swim center and police station.
"Redevelopment can be a really effective tool for revitalizing urban neighborhoods and community districts but there needs to be greater accountability and greater transparency in the process," Kehoe said. "Sometimes that money is spent elsewhere and it becomes a slush fund that locals can use for projects they can't fund any other way."
Legislators have passed laws increasing oversight on the agencies, but many experts agreed that regulating them is a cat-and-mouse game.
"There are some people who think there should be some sort of state department of redevelopment or administrative appeals mechanism, but those proposals haven't gotten very far because of cost and (the prospect of) establishing a new bureaucracy," said Peter Detwiler, staff director for the Senate Local Government Committee.
Many complain that redevelopment projects tend to benefit large retail chains, lawyers and property appraisers more than residents in the project areas.
Local governments spend millions of taxpayer dollars enticing big-box businesses and auto dealerships to move into their jurisdictions - sometimes at the expense of smaller businesses, Norby said.
"Local government will naturally pick sales tax generators because it's the sales tax that helps their general fund," Norby said. "So we wind up subsidizing these big-box retailers and shopping centers that sell us all this cheap stuff from abroad rather than developing good-paying jobs and our manufacturing base."
A 1998 study by the Public Policy Institute of California found most redevelopment agencies surveyed weren't as successful in increasing property values as they claimed.
And while the public invests in redevelopment, there's no guarantee the projects will flourish.
"It's the worst kind of public partnership in that it privatizes profit while making risk public," Norby said. "If there's private demand for these things, they'll be built anyway, and if there isn't then they have no business going up."
bethania.palma@sgvn.com
626-962-8811, ext. 2108
Read more: Montebello's redevelopment loan draws ire from critics - Whittier Daily News http://www.whittierdailynews.com/news/ci_16244262?source=email#ixzz1CPLXRukf
AND
"Six decades is long enough
After 60 years of abuses, it's time to abolish the 425 redevelopment agencies and the redevelopment law that gave special powers to cities and counties to eradicate blight. Blight is whatever they say it is.
They can take private property and give or sell it to another party. They divert property taxes away from schools, fire, police, parks and libraries. The state has to backfill payment to schools to make up for monies that counties don't have, and taxpayers receive new or increased fees, taxes or assessments.
The Legislature has permitted redevelopment agencies to engage in flood control, housing for low-income families, construction of sports arenas and operating amusement parks. Should our property taxes go to subsidize corporate welfare? Property taxes should go to pay for services for the people: schools, fire and police protection, parks and libraries.
– Karen Klinger, Arden Arcade"
Letters to the editor - Sacramento Opinion - Sacramento Editorial | Sacramento Bee
source: Sacramento Connect
Daniel Borenstein: Brown is right to disband redevelopment agencies
By Daniel Borenstein
Staff columnist Contra Costa Times
Posted: 01/22/2011 09:00:00 PM PST
THE SCREAMS from cities about Gov. Jerry Brown's plans to disband about 400 redevelopment agencies across the state are shameful and hypocritical.
While city officials claim the state is trying to raid their funds, it's actually the cities, using their redevelopment agencies, that have been siphoning billions of dollars from badly needed government services and spending the money on projects that often have little to do with cleaning up blight.
The redevelopment scam, which has turned into a windfall for developers, bond marketers, planning consultants and professional sports teams, has racked up $88 billion in public debt statewide -- without voter approval. It should have been ended decades ago. Kudos to the governor for finally taking it on.
What was presented to voters in the 1950s as a plan to finance new construction in some of the worst slums in the state has morphed into a scheme to indirectly subsidize city budgets. In the East Bay, communities like Oakland, Clayton, San Pablo, Pittsburg, Hercules, Pinole and Emeryville are hogging huge sums of property tax money that should be shared with the county, special districts and schools.
Communities like San Diego and Los Angeles have used the money to fund sports complexes, while Santa Clara is planning to do the same. In Hercules, millions of dollars of redevelopment funds went to consultants who have almost no construction to show for it, Advertisement and to a company owned by the city manager's daughters that, among other things, provided mortgage loans for city employees and a member of the firm.
Indeed, an analysis released in September by a watchdog office of the state Senate found redevelopment agencies around the state that used their money primarily to pay salaries and administrative costs. Worse, a Los Angeles Times investigation published in October found that, "at least 120 municipalities -- nearly one in three with active redevelopment agencies -- spent a combined $700 million in housing funds from 2000 to 2008 without constructing a single new unit ... . Nor did most of them add to the housing stock by rehabilitating existing units.
While advocates claim that redevelopment agencies help bolster the California economy, the nonpartisan state Legislative Analyst's Office reported last week that "there is no reliable evidence that redevelopment projects attract businesses to the state or increase overall economic development in California. The presence of a redevelopment area might shift development from one location to another, but does not significantly increase economic activity statewide.
To be sure, redevelopment has helped produce low- and moderate-income housing in many communities, but at a tremendous cost. If the goal is more affordable housing, a more efficient way must be found. Redevelopment agencies as they are currently constructed and funded are not the answer.
Throughout California, property taxes are usually split among schools, counties, special districts and cities. But when a city forms a redevelopment agency, it can capture all the tax growth from that designated blighted area. Gradually, they have to start sharing some of it again with the other local governments. But most of that money goes to the redevelopment agency and can be leveraged to fund improvements within the area and offset city costs for projects there.
Without the redevelopment agencies, advocates claim, there would be little increase in property values and taxes in those areas. It's a bogus argument. According to a 1998 study by the nonpartisan Public Policy Institute of California, about half of tax increases in redevelopment areas would have happened anyhow.
Thus, redevelopment agencies are collecting money that would have otherwise gone for other critical government services.
Currently, redevelopment agencies capture nearly 12 percent of property tax revenues across the state, or about $5 billion a year.
The single biggest chunk of that money, about $2 billion, would have otherwise gone to schools. But since the state is responsible for funding schools, it's the state that loses that money. That's why the governor is so concerned about redevelopment agencies. With California facing huge cuts in social and health services and the higher education system, it makes no sense for the state to continue subsidizing redevelopment.
Counties are the next big losers, at about $1.4 billion a year -- money that would otherwise go to help provide social services, health care and public protection. Cities lose about $1 billion, but don't look for them to complain because they run most of the redevelopment agencies and subsidize their budgets with some of the money.
Indeed, since the passage of Proposition 13, the 1978 property tax-cutting initiative, cities have rapidly increased their use of redevelopment agencies to grab a bigger portion of the pie.
In 1982-83, redevelopment agencies received 3.6 percent of property tax revenues statewide. Today's it's 11.9 percent.
The distribution is wildly uneven. In Contra Costa and Alameda counties, about 12 percent and 13 percent, respectively, of property tax revenues went to redevelopment agencies in 2008-09, according to the state Controller's Office. Santa Clara and San Mateo counties were below average at 9 percent and 10 percent. But, in San Bernardino County, redevelopment agencies siphoned off 31 percent, followed by Riverside County at 27 percent.
Within Contra Costa, San Pablo's redevelopment agency this year will grab 77 percent of the property taxes collected in that city. Other hogs are Pittsburg (67 percent); Pinole (50 percent); Hercules (37 percent) and Clayton (30 percent). In Alameda County, Union City grabs 25 percent, Oakland siphons off 26 percent and Emeryville captures 77 percent.
With the promised streams of tax revenues as security, redevelopment agencies have borrowed money for their projects. As of 2008-09, they had run up a collective $88 billion in debt, including $35 billion in bonds.
It's an easy way for a local agency to borrow money. Unlike bonds for parkland, school construction or, say, a marina improvement, redevelopment bonds don't require voter approval.
It's time to put an end to all this. Money must be set aside to pay off the debts. But, beyond that, the property tax money should go elsewhere.
Brown is right: California cannot afford its redevelopment agencies.
Daniel Borenstein is a staff columnist and editorial writer.
Reach him at 925-943-8248 or dborenstein@bayareanewsgroup.com.
AND
Montebello's redevelopment loan draws ire from critics
By Bethania Palma Markus, Staff Writer
Posted: 10/03/2010 05:26:23 PM PDT
As Montebello struggles to balance its budget, the city has turned to a big, if somewhat obscure, source of credit - its own redevelopment agency.
Created in the 1940s, redevelopment agencies allow a city to capture property tax and divert it into an account to fix up blighted areas.
Montebello has created a novel use for its agency - using it to fight blight that hasn't happened yet.
When the city recently transferred $19.3 million from its redevelopment agency to its general operating fund, Interim City Manager Peter Cosentini said Montebello would cease to function without the infusion.
"We wouldn't be able to pay our bills and our people and when you get into that position blight will become rampant," he said. "Clearly the agency benefited from it."
The California Health and Safety Code prohibits "paying for employee or contractual services of any local governmental agency," other than for redevelopment purposes.
"I don't feel it's legal," said Assemblyman Chris Norby, R-Brea.
Norby and other redevelopment agency critics argue the agencies' powers are abused by local governments, who they say use the money to do favors for developers and play shell games with public money.
Montebello's justification for using the money was "unheard of," Pasadena-based attorney Chris Sutton said.
The only thing likely to stop Montebello would be a judge's order, which would be triggered by a lawsuit, he said.
Advertisement
"This process is kind of under the radar and until someone gets a court of appeals opinion or the Attorney General's office intervenes they're going to keep doing it," Sutton said. "It's a problem."
To form a redevelopment area, cities must make a finding of blight. Once the existence of blight is established, the city is able to siphon off property tax into an account that is usually controlled by the City Council.
Sutton said cities often skirt the rules.
Pasadena has used redevelopment money to pay police and firefighter pensions while Los Angeles has used funds from its Bunker Hill redevelopment zone for projects outside the project area, he said.
Statewide, redevelopment agencies divert billions of dollars in property tax yearly that would otherwise go to counties, schools and special districts, experts said.
While California is broken up into 58 counties and 478 cities, there were 425 redevelopment agencies as of 2008, according to data from the state controller's office.
In 2008-09, Los Angeles County lost 13.7 percent of property tax revenues that would otherwise go to the county general fund, totalling $428 million.
In 10 years the county lost $2.7 billion to redevelopment agencies, according to county documents.
"There is a concern because it seems to be an ever-growing share of local revenues," said Tom Tyrrell, an attorney for L.A. County. "It's a fiscal stress and there are people who believe it's a very damaging one in light of the already-restricted state of local finance."
If used correctly, redevelopment can benefit communities, said state Sen. Christine Kehoe, D-San Diego.
San Diego used redevelopment money to build Petco Park where the Padres play, sparking millions in subsequent investment, she said. The city also used the funds to revitalize a slum in 10 years, she said, bringing in a library, swim center and police station.
"Redevelopment can be a really effective tool for revitalizing urban neighborhoods and community districts but there needs to be greater accountability and greater transparency in the process," Kehoe said. "Sometimes that money is spent elsewhere and it becomes a slush fund that locals can use for projects they can't fund any other way."
Legislators have passed laws increasing oversight on the agencies, but many experts agreed that regulating them is a cat-and-mouse game.
"There are some people who think there should be some sort of state department of redevelopment or administrative appeals mechanism, but those proposals haven't gotten very far because of cost and (the prospect of) establishing a new bureaucracy," said Peter Detwiler, staff director for the Senate Local Government Committee.
Many complain that redevelopment projects tend to benefit large retail chains, lawyers and property appraisers more than residents in the project areas.
Local governments spend millions of taxpayer dollars enticing big-box businesses and auto dealerships to move into their jurisdictions - sometimes at the expense of smaller businesses, Norby said.
"Local government will naturally pick sales tax generators because it's the sales tax that helps their general fund," Norby said. "So we wind up subsidizing these big-box retailers and shopping centers that sell us all this cheap stuff from abroad rather than developing good-paying jobs and our manufacturing base."
A 1998 study by the Public Policy Institute of California found most redevelopment agencies surveyed weren't as successful in increasing property values as they claimed.
And while the public invests in redevelopment, there's no guarantee the projects will flourish.
"It's the worst kind of public partnership in that it privatizes profit while making risk public," Norby said. "If there's private demand for these things, they'll be built anyway, and if there isn't then they have no business going up."
bethania.palma@sgvn.com
626-962-8811, ext. 2108
Read more: Montebello's redevelopment loan draws ire from critics - Whittier Daily News http://www.whittierdailynews.com/news/ci_16244262?source=email#ixzz1CPLXRukf
AND
"Six decades is long enough
After 60 years of abuses, it's time to abolish the 425 redevelopment agencies and the redevelopment law that gave special powers to cities and counties to eradicate blight. Blight is whatever they say it is.
They can take private property and give or sell it to another party. They divert property taxes away from schools, fire, police, parks and libraries. The state has to backfill payment to schools to make up for monies that counties don't have, and taxpayers receive new or increased fees, taxes or assessments.
The Legislature has permitted redevelopment agencies to engage in flood control, housing for low-income families, construction of sports arenas and operating amusement parks. Should our property taxes go to subsidize corporate welfare? Property taxes should go to pay for services for the people: schools, fire and police protection, parks and libraries.
– Karen Klinger, Arden Arcade"
Letters to the editor - Sacramento Opinion - Sacramento Editorial | Sacramento Bee
source: Sacramento Connect
