Clearly, redevelopment is out of control.
Under the thin guise of eliminating blight, it consumes a growing share of property taxes, incurs ever burgeoning debt, spawns sales tax wars among cities and tramples on property rights. Originally created as a temporary measure following World War II, it threatens to become a permanent cancer on California's political and economic life. Ending redevelopment abuses can be approached on four levels:
LOCAL ACTIVISM: If your city has redevelopment, learn more about it and help educate your fellow citizens. Monitor agency agendas, challenge new debt issuances and expansion of project areas. Support local small businesses threatened with eminent domain and facing giant tax-subsidized competitors.
If your city has no redevelopment, use the examples of abuse to keep it out of your city. Wherever you live, support officeholders and candidates who understand redevelopment and can make their own judgements independent of those who profit by it.
LEGAL CHALLENGE: County and school officials must be more aggressive in appealing redevelopment tax diversions. Grand Juries must broaden their probes into redevelopment. As the California State Supreme Court becomes more protective of property rights, eminent domain abuses can be more successfully challenged. A growing number of public interest lawyers are willing to defend small property owners against redevelopment agencies.
STATE LEGISLATION: Redevelopment is a layer of government created by the state, and has no powers other than those granted by the state. Led by Senator Quentin Kopp (I-San Francisco), numerous redevelopment reform bills have been introduced into the legislature. The following reforms must continue to be addressed:
Eminent Domain: Controls must be placed on the widespread abuse of eminent domain.
Sales Tax Disbursement: Some type of per-capita sales tax disbursement would end predatory redevelopment and return cities to an equal footing. Assured of a stable revenue flow based on its population size, cities could concentrate on providing basic services, rather than subsidizing new businesses.
Debt Control: Make redevelopment debt subject to voter approval. This would limit debt issuance and make agencies more publicly accountable.
Mandatory Sunsets: The 40-year sunset law must be given teeth and enforced. If redevelopment agencies truly have eliminated blight, then there should be no further need for them.
Comprehensive Fiscal Reform: A rational and stable method of funding local government must be found, shifting cities back to greater reliance on property taxes and less on sales taxes.
Unfortunately too many legislators and their staffs still do not fully understand redevelopment and see little political gain in challenging it. Its opponents are many, but still scattered and unorganized, while its beneficiaries are vocal and well-funded.
A flurry of redevelopment bills were introduced into the California State Legislature during the 1997-8 session, including three important curbs on redevelopment abuse:
AB 939, authored by Assemblyman Tom McClintock (R-Northridge), This would place mandatory sunsets on agency operations. Redevelopment agencies would be allowed to finish all existing projects, but not commence new ones not already started. Upon completing existing projects, agencies would stay active only to pay off all existing debt, then shut down. All property taxes diverted would then be restored to the cities, counties and school districts. Hundreds of supporting letters from citizen activists poured in, but the CRA orchestrated strong opposition from redevelopment agencies and developers. The bill died in the Assembly Local Government Committee, but only after a lively hearing that observers noted was one of the longest and frankest exchanges on redevelopment abuses the Capitol had ever witnessed.
AB 1677, also by McClintock, this bill would require voter approval of all new redevelopment bonds. This would close the legal loophole which exempts agency debt from voter approval, which does apply to city, school and state bonds. Opposition to this bill came from the CRA, the League of California Cities and from major bond brokerage firms that stood to lose huge commissions from bond sales. The bill also died in the Assembly Local Government Committee.
AB 1835, authored by Assemblyman Tom Torlakson (D-Martinez), this bill would ban using public money to lure an existing business to move from one city to another. The bill struck at the heart of sales tax piracy, intending to end the corporate extortion that pits one city against another for major retailers. Under CRA pressure, the bill was watered down and contained a number of loopholes, but was still strongly supported by MORR as an important first step. AB 1835 passed the Assembly, 48-23, but failed narrowly in the Senate Local Government Committee. Opposition was intense from lobbyists representing developers and retailers who stood to lose millions in public subsidies.
Many legislators still need to be educated about redevelopment by their constituents through letters, phone calls, faxes and testimony before key committees. As new term limits take effect, legislators will hopefully focus more on doing the right thing, and long-term relationships with lobbyists will be less important.
Equally important will be the impact of education advocates, once they realize how redevelopment revenues can be redirected into California's public schools. The combined political clout of the California Teachers Association and the California School Boards Association dwarfs that of the redevelopment establishment.
STATEWIDE INITIATIVE: A ballot measure requiring voter approval of redevelopment debt looks likely by the June, 2000, primary. Proposed by the Paul Gann's Citizen Committee, it would require the same voter approval for redevelopment bonds that exists for school bonds.
The ultimate goal of any initiative must be to disband the redevelopment agencies and return the property taxes to schools, counties and cities.
Opposition to redevelopment is growing and cuts across partisan lines. It includes pro-property rights Republicans and anti-corporate welfare Democrats. It includes conservatives opposed to growing public debt, and liberals opposed to the destruction of poor neighborhoods. It includes free market libertarians and civil rights activists fighting the displacement of minority communities. It includes environmentalists concerned about suburban sprawl and preservationists lamenting the demolishing of historic downtowns.
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