[Editor’s Note: Latest dispatch from City Hall’s lobbyist in Sacramento updating the threatened discarding of redevelopment agencies.]
A summary of each scenario currently being discussed regarding the statewide elimination of redevelopment agencies:
1) GOP 5 to the rescue — As we reported a couple of weeks ago, the so-called GOP 5, five Republican senators, made public their demands of Gov. Brown in exchange for their votes to allow California voters the opportunity to extend certain taxes that are set to expire June 30. There are six “big ticket” items they would like to see addressed by the governor, and the preservation of RDA (redevelopment agencies) and enterprise zones were on that list. Just yesterday afternoon, we passed along information that the governor and the Republicans are close to agreeing on a new spending cap for the state (a spending cap is also on the list of six items to be addressed). At this time, we do not yet know the status of the RDA question in those negotiations. But we know for a fact that at least two members of the GOP 5 have specifically requested RDA be preserved. One member of the group is specifically supporting the most recent proposal from the California Redevelopment Assn. We believe that the negotiations between the governor and these Republicans are coming close to a resolution, especially in light of the information regarding a spending cap. If the GOP 5 are able to preserve RDAs, we do not anticipate an immediate negative impact to your RDA.
2) Legislature secures two-thirds vote — If the governor and the GOP 5 do not reach an accord on RDA preservation, then the Legislature could still try and pass their preferred course of action, to eliminate RDAs, at least as we know them to exist today, steal the $1.7 billion, and then “recreate the best aspects of RDA” for the future. As you know, the Assembly fell short by one Republican vote (all the Democrats voted to eliminate RDAs) in passing the legislation to eliminate RDAs. The bill would still need to be considered in the Senate before moving on to the governor. There is no guarantee the Senate has the votes, but the proponents certainly came very close to passage in the Assembly. I believe a lot of people around here are waiting to move on RDA until more is known regarding the status of the GOP 5 and the governor since it is on the list of items the Republicans would like to negotiate on. But if the conversations fall apart, there could be a renewed push to pass the elimination legislation. I think the odds are 50/50, or even better, that the bill could pass. This is the worst possible outcome for your RDA. You would lose the legal ability immediately to utilize your RDA, its funds would be stripped bare, any project you have sought funding for after Jan. 1, 2011, would be scrutinized by both a newly constituted Oversight Board and the Dept. of Finance, with the only “good” news being a promise…with no details, mind you…of a slimmer, faster, stronger, better form of RDA to be created sometime down the line. Should the outright elimination win out, it will create the most instability and uncertainty of all the proposals we know to exist.
3) Killing off, but details to follow — This proposal (and I even hesitate to call it a formal proposal because no one has seen any actual paperwork on it) stems from a strong sense of frustration by several key, high-ranking staff members in the Legislature who are finding difficulty in dealing with the RDA issue in general. More precisely, it has become known over the past couple of weeks that to kill off RDAs is likely a majority vote (I’m sure this would be litigated down the line, but the Legislature’s attorneys say they are on decent footing eliminating RDAs on a majority vote) but that to actually capture the $1.7 billion and use it to offset the state’s General Fund costs to Medi-Cal and the courts requires a two-thirds vote. If, in fact, the two-thirds vote threshold to kill RDAs and steal the money cannot garner the necessary votes, some folks are talking about the freezing of local RDAs legal ability to function, and then come back and do serious reforms. In my opinion, this is in the middle of complete annihilation and outright preservation in that your RDA would likely still exist in name, with the operations allowed sometime down the line, albeit with far more restrictions. Think of it almost like a suspension of your RDA. Under this scenario…because there are so few details…it is difficult to gauge the impact of how you could be affected.
I really believe that we are close to standing on the precipice of a decision by the Legislature and the governor on the best way to deal with RDAs. I think the course of action taken by those entities will fall in the exact order of my description above, i.e.:
The GOP 5 and the governor will either agree to preserving RDAs or they won’t. If they do, most if not all of the tools your RDA utilizes will likely be retained. If they do not reach an agreement, I think the Legislature will try to outright kill RDA through either SB 77 or AB 101. If they can get the two-thirds vote to kill RDA and take the money, they will. If they can't achieve that result, I think they would suspend your RDAs activities and significantly pare down its functions with follow-up legislation since those only require a majority vote.
Let’s not forget that any elimination or paring of RDA responsibility, not consented to by CRA, will be litigated immediately! In sum, any way you slice it, RDA is going to be an issue that will not be fully sorted out for some time…regardless of what direction the elected officials take.
I hope this description is helpful in defining where I think we are right now in Sacramento regarding RDA. I am almost reluctant to hit the Send button. Events unfold and change so quickly right now.
