Man on the Street: Redevelopment Agencies

By: Raakin Hossain

The State of California's budget deficit is currently $25.4 billion. Former Governor Arnold Schwarzenegger had taken $2 billion over a period of two years, but current Governor Jerry Brown has proposed on taking it to an all new level of abolishing redevelopment agencies all together. This proposition is intended to save the state $1.7 billion.
Governor Brown said his plan would provide more authority to local governments. However, the money which was initially to be for the redevelopment agencies are planned for distribution to school districts, counties, and primarily the state.
Redevelopment agencies receive their income from property tax revenue. This is used to provide low-income housing, reproducing run-down neighborhoods, and other communal projects.

“I wouldn't trust the state. I understand we are in a budget deficit. We all have to make the sacrifices. I'd hate to see the funds go to the state as it does direct good to us,” says Kasey Egelus, a resident of Cerritos. “An alternate solution would be to cut the salaries of the councilmen and other legislatures.”
“We hear a lot about government conspiracies so it's better for us to keep the money and do it on our own,” says Christopher Hernandez. “I think we should keep the money for the schools. Anything for education is not wasting money, anyway.”
In order to eliminate redevelopment agencies, however, the bill must first be submitted to the Legislatures. There is a high sense of likelihood that it will be challenged, as Proposition 22 protects the current status of the agencies.
Redevelopment agencies were instated in 1945 and then in 1952 was given the power to use property tax revenue.
John Shirey, executive director of the California Redevelopment Association, told the LA Times that, “This is virtually the state's only economic development program. It supports over 300,000 jobs in normal times and adds $40 billion to the state's economy, $2 billion of which is tax revenue to the state and local governments.”
“The $1.7 will be misused like most funds that are not accounted for,” says Steven Rodriguez, a student at Cypress College. “The State hits us students. The agenda is to tax us and make us pay more when it should be the top tax bracket paying more.”
“I believe these services and agencies are needed in these times of hardship. If they want to cutback, then it should be on unnecessary things such as corporate loopholes and tax reductions from the Bush era,” says Danyal Ahmed, a resident of Orange County. “We have very little services for the low-income class, so let's not take away something which would adversely affect them.”
“Right now, I think we need those funds for low-income housing, libraries, and such more than ever,” says Sarah Rahimi. “Many have lost their jobs and are going back to school. Many others have lost their homes and need the housing. If all those employees from the agencies get laid off, they will need unemployment benefits. Moreover, how will we get them employed again?”
“They should keep the agencies for the benefit of improving the economy. There's plenty of ways that they an cut costs though,” says Wesley Eckenrode, a Cerritos resident.
Brown recently cut $400 million from community colleges and proposed to raise tuition from $26 to $39. From the $1.7 billion shaved from redevelopment agencies, he plans to send $1.1 billion of it to schools.
“What we’re doing here is spending money at the local level that the state doesn’t have,” Brown said. “So we want to take that money and leave it at the local level for the purposes that it was historically intended. That’s police or fire or local activities...counties, or schools.”
There are currently over 400 redevelopment agencies which produce nearly $5 billion annually, funds which would have gone to the state and counties. Last November, Proposition 22 prohibited the state from acquiring wealth from the redevelopment agencies. Supposedly, if money cannot be taken from the treasury, the only other solution would be to eliminate the agencies as a whole.