Let’s take a look at how the property tax money flows. For Downey the normal general assessment (exclusive of special assessments) is divided up approximately as follows: community college 6%, county services 48%, schools 40% and city 6%.
One of the main features of Redevelopment under the Health and Safety Code is what is called pass-through. That is, all the money (taxes) which would normally go to the schools and county are instead diverted to the city redevelopment agency. There is a very short time at the beginning of the project when these percentages or terms can be negotiated, then they are set for the life of the plan which is typically 30 years.
Now, in the case of the schools it was felt that the school pass-through did not matter because the state made up in Average Daily Attendance (ADA) funds for their loss with the result that the schools still got their full portion. And in the past, the county did not seem to care about their pass-through portion because they had extra funds anyway. Not any more. And so the trouble begins.
Now the state is coming in and saying, "Hey, cities, we have been making up for your school pass-throughs to the redevelopment agencies for years, and now we can’t afford to do that so much anymore." When you consider the City of Industry had 500 million dollars in cash in their redevelopment coffers at the end of 1991 and was generating more money each year than was being spent, you can see why Sacramento might want to tap the till.
Last year the state took from Downey’s redevelopment agency 16 percent of its total redevelopment tax increment which came to about $244,000. There was a lot of protest, lobbying by city governments, and the private lobbying group California Redevelopment Association, so this year the raid will be much smaller, 15 percent of just the administrative budget or some $66,000 from Downey.
Now Downey schools did, in fact, "waive off" their funds on all our project areas, but there is an interesting proviso in the language of Amendment 4. Because Downey High is inside the Amendment #4 area and is considered blighted, anytime the Redevelopment Commission wants to it can, and could have in the past, vote money for the Downey High School building rehabilitation program (eg. buildings R & S) by a simple majority vote, something they seem loathe to do.
So you can see, there is some basis for the state to feel they have a right to some of the money our school board and hundreds of others gave away to the city redevelopment agencies, assuming the state would make up the difference. These same principles apply to the County pass-through as well.
These funds have been used to subsidize redevelopment projects, a giveaway to developers. This is just another example of how Redevelopment has subverted the normal or originally planned flow of tax dollars to the various agencies. Redevelopment in all ways unbalances the historical funding channels that have been in place for decades and has left agencies dependent on replacement funds that are themselves uncertain.