Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez…
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Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez……[more]

July 29, 2021 • 10:02 AM

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California Redevelopment Agencies on Budget Chopping Block Print
By Ashton Ellis
Thursday, January 13 2011
The estimated savings from eliminating all of California’s redevelopment agencies range from an immediate $1.7 billion to an overall reduction in spending of $6 billion.

California Governor Jerry Brown’s budget cutting proposals are exciting howls from his liberal base as well as many pro-business Republicans.  But amid the outcry over slashing services and extending tax increases, one voice for substantive reform is cautiously optimistic. For Assemblyman Chris Norby (R-Fullerton), Brown’s call to eliminate redevelopment agencies is worth heeding. 

“We have to give credit when it’s due, and I think Governor Brown is right to eliminate redevelopment agencies,” said Norby, a former Fullerton city councilman and founder of Municipal Officers for Redevelopment Reform (MORR).  “Every taxpayer should be concerned about redevelopment agencies’ lack of accountability, abuse of eminent domain powers and subsidizing projects the free market won’t fund.” 

The estimated savings from eliminating all of California’s redevelopment agencies range from an immediate $1.7 billion to an overall reduction in spending of $6 billion.  All parties agree that some mechanism would need to be created to honor the redevelopment contracts currently in force. 

To critics like Norby, redevelopment agencies are an “unknown layer” of state government that few voters understand.    In his popular pamphlet and website, Redevelopment: The Unknown Government, Norby explains how redevelopment agencies operate. 

According to Norby most voters misperceive redevelopment agencies as arms of local government.  In fact, they are extensions of the state, though located and operated locally.  Blurring the distinction still further is the method agencies use to fund their operations. 

Redevelopment agencies are public entities, thus the money they spend comes from taxpayers.  In order to access taxpayer funds, agencies must first go into debt by issuing bonds to fund a project.  The increase in property tax values due to the project is called “tax increment,” which is then captured by the agencies to pay off the bond debt. 

This formula produces increases in property taxes, but not income to local government.  The problem for municipal officers like Norby is that voters see their tax bills going up, but not the quality of their schools, roads and other public services.  For that, local officials must submit an explicit tax increase to voters while risking charges of overspending. 

Widening the gap between perception and reality is the lack of accountability to voters.  Since redevelopment agencies are not part of local government, they don’t need voter approval before exercising their powers.  Thus, agencies can condemn land as blighted and unilaterally use eminent domain without ever fearing a direct assault from taxpayers.  Typically, voters unleash their anger on local elected representatives who have little to no ability to directly control an aggressive redevelopment agency. 

For their part, California’s public schools are protected from the loss of revenue to redevelopment agencies.  Proposition 98 guarantees public schools a level of financing that the state must provide if local governments are unable to do so.  When redevelopment agencies siphon away Prop 98’s guaranteed increases, the state “backfills” the difference.  That, of course, takes money away from other programs.  With 425 redevelopment agencies engaging in projects worth billions of dollars, raiding other accounts has become an accepted method of meeting the state’s obligations. 

Yet getting paid doesn’t address the fundamental problem facing California’s public schools.  “Public schools, and California government in general, have plenty of money,” says Norby.  “The problem is that no agency of the state can choose how to spend the money they get.  There’s no discretion on what to cut and what to fund.  What we need to do is free up the money government agencies have so they can spend it more effectively.” 

Asked if he supports Governor Brown’s budget proposal, Norby is quick to say he doesn’t like extending supposedly “temporary” tax increases.  He does, however, credit the governor for signaling a shift in focus.  “I suspect Governor Brown knows his tax increases won’t win (in the upcoming special election), and that he knows he has to reform state government internally.  Getting rid of redevelopment agencies eliminates a layer of bureaucracy that makes it harder for government to operate.  In my opinion, that’s a good place to start.” 

Quiz Question   
In what year did the Fidel Castro-led revolution overthrow the Cuban government of President Fulgencio Batista?
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Notable Quote   
 
"An economy growing at 6.4% would be great news for most White Houses. But with inflation surging to 5.4%, many are not feeling the economic good times, and they know exactly whom to blame.'Everything just costs more, and no one's really making more other than if you get government money, which I did get some,' 52-year-old school maintenance worker John Novak told the Associated Press this week. '…[more]
 
 
—The Editors, Washington Examiner
— The Editors, Washington Examiner
 
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