After issuing a statement of fighting words, Mehaul O’Leary, Chair of Culver City’s embattled Redevelopment Agency, pushed back from the table to watch the following three unfolding Sacramento scenarios that will hint at the state Legislature’s intentions:
Thursday at 9:30 — The Senate Budget and Fiscal Review Subcommittee will discuss Gov. Brown’s proposal to eliminate all 425 of the state’s hometown redevelopment agencies.
Monday at 1 — The Assembly Budget Subcommittee will discuss the governor’s plan.
Wednesday at 9:30 — The Senate Governance and Finance Committee will discuss the fate of redevelopment agencies.
Within the next four or five weeks, the entire Legislature is expected to vote on whether to place Gov. Brown’s budget-shrinking plan for redevelopment agencies on a special June ballot.
As the Agency chair, Mr. O’Leary has been closely monitoring events in Sacramento daily for the past month, since the governor detonated his bomb announcement.
“Cities are fighting to retain their redevelopment agencies and to protect their agency funds,” he said, “because of the evidence that shows how agencies have helped so many communities.
Room for Everybody?
“Other groups have different opinions of agencies because developers are getting chunks of money from agencies to do developments that should be viable and should be worthwhile doing in a capitalist society. In a market that did not have a redevelopment agency, a city would have to consider the expense of doing these kinds of projects.”
In Culver City, hundreds of miles away from the capitol, what can Mr. O’Leary do to influence the Legislature?
“I am of two minds,” he said. “I believe that drastic measures have to take place in Sacramento to fix our situation. We cannot continue down this road. Whatever the drastic measures are. A budget is a budget. The budget deficit has to be solved.
“If the drastic measures mean taking away the redevelopment agencies to fix the underlying problems, then we can revisit redevelopment agencies at a later stage and look at recreating them in a different way.
“Right now, the new governor is looking at all drastic measures, and we will see.
“I am going to fight to save our Redevelopment Agency for the benefits it can bring the community.
“If the agencies are taken away, we will fight for something else.
“I am relatively new in the political arena, but I am a businessman first,” said the owner of Joxer Daly’s Irish pub.
In bird-dogging events in the state capitol, Mr. O’Leary forwarded this pertinent posting from this morning’s online edition of the Sacramento Bee:
Gov. Jerry Brown's proposed 2011-12 budget has many controversial aspects, but one of the most contentious is his call for eliminating 425 local redevelopment agencies and redirecting about a third of their property tax revenues into other state and local services.
Last week, nine big city mayors called on Brown to abandon his proposal, claiming that redevelopment is central to economic development. But Brown insists that supporting schools and other public programs is a more important use of the funds.
Underlying the political exchanges is a phenomenal growth in redevelopment agency activity — especially their diversion of property tax money into their own activities. By law redevelopment agencies can retain property taxes on increased development within redevelopment projects, although they must share some of it with other local governments and schools under reform legislation enacted in the 1990s.
Each year, the state controller's office publishes a thick report on the activities of redevelopment agencies, most of which are operated by city governments. And the latest report, covering the 2008-09 fiscal year, details the extent of their finances.
It reveals, for instance, that redevelopment agencies captured about 12 percent of all the property taxes collected in the state, $5.7 billion. It shared $1.2 billion of those revenues with schools and other local governments, but retained the other $4.5 billion.
That $5.7 billion is well over three times as much tax money as redevelopment agencies captured 10 years earlier, an examination of the 1998-99 controller's report shows. And the debt incurred by redevelopment agencies also has grown sharply. In 1998-99 they had $42.7 billion in debt. By 2008-09, that had more than doubled to $87.5 billion, most of it in the form of bonds.
Brown would allow the agencies to retain enough tax money to pay their debts, but shift about $1.7 billion to the state for one year, and then to schools and local governments. That $1.7 billion represents 40 percent of the money redevelopment agencies retain, calculated to be the portion of the retention that the state must pay to schools under Proposition 98, enacted by voters in 1988.
