Created in 1945 in an effort to address post-war blight, money was provided by federal grants to help fund development. But the program eventually morphed into its current system of using a portion of a community’s tax dollars to fund development projects within that community. Critics have accused the economic development program of becoming a slush fund for politically favored developers and other private interests.
Governor Jerry Brown wanted to eliminate the agency altogether believing tax dollars were better spent funding education and law enforcement. But the Democratic leadership felt that was going too far and approved two bills, AB26 which eliminated the redevelopment agency and an alternative program called AB27 which stated the agencies could exist if they agreed to use some of the tax money, $1.7 billion this year and $400 million in the future towards schools and other public programs such as fire districts.
After the statewide Redevelopment Association and League of California Cities sued the state over the two bills, the High Court unanimously ruled that AB26, eliminating the agencies, was legal but struck down AB27 claiming requirements compelling the agencies to use the money to fund other groups was unconstitutional.
“For far too long, California taxpayers have financed obscure government agencies that use taxpayer dollars and their power of eminent domain to benefit politically connected developers. During these tough economic times, developers should not be on the public dole while police officers and teachers are getting pink slips,” said Marko Mlikotin, president of the California Alliance to Protect Private Property Rights - a coalition that includes family farmers and taxpayer advocates that praised the ruling as “a victory for California taxpayers.”
But supporters such as the Non-Profit Housing Association of Northern California say the decision will be “devastating to millions of low-income Californians who have been hardest hit by the largest economic recession the state has seen in years.”
“Redevelopment funds are the largest local funding source for affordable homes and rental housing,” the association stated. “Over the coming years the loss of this funding will mean thousands more Californians living on the streets and tens of thousands more living in overcrowded and substandard conditions.”
So what happens next? What about projects in our Mid-city community? Yonah Hong from CRA and our hard working community liasion said “Fortunately, most of our Mid-City projects are safe. Many of the projects were fully executed, which means that the projects will be able to continue as planned. The only projects that may face difficulties are the projects that have only land acquired and no physical work beyond that”. Depending on the source of funding that land may be transferred to another agency or sold with the money reimbursing the original source.
To learn more visit http://www.calredevelop.org/