Redevelopment Agencies: Pronounced Dead (Don’t Believe It)

California’s redevelopment agencies have received a death blow…for now…thanks to the California Supreme Court’s December 29 ruling. But government’s appetite for your money and private property remains insatiable. A 66-year habit is hard to break.

After World War II ended in 1945, the Legislature permitted cities and counties to establish special agencies to revitalize their blighted areas. Since that time, roughly 425 community redevelopment agencies (RDAs) have been dedicated to spending your property tax dollars on government-subsided housing, commercial development, eminent domain acquisitions and other land use and construction projects—as they deem necessary in the name of urban renewal.

But in January 2011, Governor Jerry Brown decided that the $1.7 billion in property taxes going to the agencies this year, about 12% of total statewide property taxes, would be better spent on helping to close California’s projected two-year, $25 billion budget shortfall. Besides, he concluded, the redevelopment agencies had developed the bad habit of misusing the funds! Monies supposed to be used to build affordable housing and, he’d hoped, to go to schools and public safety, were sometimes spent on private developers, golf course upgrades, extravagant dinners and apparel, and even lobbyist fees.

So in June, Brown and the Legislature decided on a compromise: the RDAs  would be dissolved (Assembly Bill 1X26) and municipalities would be permitted to join a voluntary redevelopment program by making payments annually to the state, to be used for schools and other services (AB 1X27). One month later, a petition was filed with the California Supreme Court by the California Redevelopment Association, the League of California Cities and the Northern California cities of San Jose and Union City, asking the Court to declare the elimination of redevelopment agencies unconstitutional.

Meanwhile, some municipalities made plans to go along with the compromise, though they weren’t happy about it. In Ventura County’s City of Thousand Oaks, some council members who voted to make the payment of $5.9 million to the state in the current fiscal year and an annual $1.4 million thereafter, to be part of the voluntary program, called the payments “ransom money” and “extortion.” They were angry that the state would take the city’s funds and redirect them to programs the state chose, rather than leave them to local discretion. Yet Thousand Oaks had its own issues with what many have called a misuse of redevelopment dollars: a private developer had received a lucrative deal from the city to develop an upscale shopping center, which included the RDA purchasing the land, paving sidewalks, paying developer fees and charging $1 per year for the land lease.

Other cities and counties were disgruntled with the governor’s legislation as well. They perceived a major source of their power being taken away, as RDAs provided them with funds (“property tax increments”) and authority to build low-income housing complexes, establish and renovate so-called “blighted” properties (a designation typically influenced by special interests), award loans and grants to businesses, establish public works projects and acquire property (via eminent domain), all purportedly to “create jobs” and “rebuild communities.”

The Supreme Court ruling alas came in on December 29, 2011. Accordingly, the State of California is on sound legal footing to eliminate redevelopment agencies. It may not, however, require payments be made to the state as part of a voluntary redevelopment program (where the state would redirect the funds to local services) because such a mandate would not be voluntary.

Some California taxpayers and private property rights groups are applauding the Supreme Court’s ruling as a triumph. Municipalities across the state are displeased, of course. They want the control of your tax dollars and property rights in their hands, not the state’s. For now, the 425 RDAs appear to be pushing up daisies; however, the root of the problem still exists. By its own hubris, your local government considers itself the authority on how to spend your money, utilize your land, rejuvenate your community, create jobs and grow the economy.

But you know those are not the proper, or even feasible, roles of government. You know that only you and your neighbors, individuals and businesses, operating in a private and free-choice marketplace can make the decisions that will truly safeguard your prosperity and quality of life. You know that when government taxes and spends according to its own priorities, the result is crony capitalism.

Right now our local officials are working on a “solution” to regain their power. Their central planning scheme has only been derailed temporarily. The message we must send them is NO to redevelopment agencies, NO to tax-and-spend economics and YES to stepping out of the way to allow private decisions to be made by individuals and businesses on how to grow their personal and commercial economies.

It’s time to overhaul our local governments. And it can’t be left up to the tried-and-untrue left and right wings of the Big Government Party. Real and lasting change must come from those who understand LIBERTY and are willing to fight for it. Libertarians are ready to do just that. With your help, the CALIFORNIA LIBERTARIAN PARTY will take the critical steps to revive our State as a place of freedom and prosperity. We urge you to come forward and JOIN US today!