California State Treasurer Bill Lockyer delivered some disheartening news to a small group of local officials Thursday night: Local redevelopment agencies are all but dead.
Officials in Burbank and Glendale have joined with other local governments to protest Gov. Jerry Brown’s proposal to dissolve redevelopment agencies, sending an estimated $1.7 billion to state coffers. Local officials have argued that the move would take away an important development tool. Brown and state legislators say the agencies keep revenue away from schools and other services.
But Lockyer’s message to less than a dozen local lawmakers, teachers and officials gathered in the auditorium at Luther Middle School in Burbank on Thursday night was clear. Brown’s proposal would prevail.
“This argument is over,” Lockyer said.
The state budget briefing was set up by state Sen. Carol Liu (D-La Cañada Flintridge), who earlier that day in Sacramento took part in a party-line vote in a joint Assembly and Senate conference committee to approve Brown’s budget plan, including the elimination of redevelopment agencies. The Assembly and Senate are expected to vote next week.
Following passage by voters of Proposition 22 last fall, the state is prohibited from transferring money from one account — redevelopment agencies — to another, such as education, leaving the governor no legal alternative but to shut down the departments, Lockyer said.
“We only had two options legally: shut redevelopment agencies down or do nothing,” he said. “There was no way they would voluntarily contribute to the state deficit.”
The news was greeted less than enthusiastically by local officials.
“It is so disappointing when state representatives think local funds belong to them and drag it into Sacramento’s black hole,” Glendale City Manager Jim Starbird said. “I am hoping they will vote against this and I am expecting our elected representatives to put up a fight.”
League of California Cities officials disagree with Brown’s interpretation of Prop. 22. They have called the plan to eliminate redevelopment agencies unconstitutional and plan to file a lawsuit if Brown’s proposal is approved by the state Legislature, League spokeswoman Eva Spiegel said.
“The governor knew that schools just can’t make another cut this year,” Lockyer said. “And if the decision goes to the voters, I know who wins that one — it’s not a fair fight.”
If the governor’s tax extension does not pass in June, however, Lockyer said across-the-board cuts will place schools in further jeopardy by having to possibly cut six to eight weeks out of the next school year or significantly increasing class sizes.
“There are so many unknowns at this point, and it’s a shame to hear the state pitting redevelopment agencies against schools,” said Ruth Davidson-Guerra, Burbank’s assistant director of community development. “And if it’s not the schools, it’s choosing between redevelopment, or police, or fire.”
The Burbank Redevelopment Agency has spent $42 million on infrastructure improvements for the school district and $53 million for police and fire facilities when there were no other funds available, Davidson-Guerra said.
Glendale’s redevelopment agency plans to build a soccer field at Columbus Elementary School, a passageway off North Brand Boulevard into Glendale Central Park, revamped libraries and future affordable housing — all of which are unlikely to come to fruition if Brown’s plan is approved, Starbird said.
“Those who are subsidized are saying this is the end of the world,” said Assemblyman Mike Gatto (D-Silver Lake). “I don’t think this is the end of the world. Cities developed and redeveloped before the state subsidies and I don’t think wise reinvestment in cities will necessarily go away.”
Liu invited officials to meet with her and her staff to discuss transitional fixes to cover the existing projects approved prior to the cut-off. City officials appreciated the gesture, but said they remained skeptical.
“It’s disconcerting that an agency that does great things for the city can be simply eliminated and for us to expect its replacement to be developed in three months,” Davidson-Guerra said.
As for compromise proposals — like Los Angeles Mayor Antonio Villaraigosa’s plan to have redevelopment agencies give more tax money back and have the state borrow a little more for the upcoming fiscal year — Gatto said borrowing was not an option.
“Maybe later this year we can do something to fix it. In the short term, we are running out of time and running out of alternatives,” he said.