LAO Recommends Changes to Redevelopment to Benefit Schools

The State of Califrornia Legislative Analyst Office has provided an overview of the Governor’s “May Revise” budget. In the overview, the analyst suggests that as much as $300 million can be saved for California schools by making changes to redevelopment law.

From the Appendix:

LAO Alternative Budget: Additional Savings Proposals
Issue 2008-09 K-14

Redevelopment-Capture prior-year underreported redevelopment pass-through payments. – $70.0 million
A State Controller’s Office audit found that (1) some redevelopment agencies have not made required pass-through payments to K-14 districts and (2) some K-14 districts have not reported these sums as property taxes. We recommend (1) redevelopment agencies be required to pay overdue sums and (2) K-14 districts modify their reporting to offset the state’s last five years of increased costs.

Redevelopment-Modify redevelopment pass-through process to ensure funds are provided and reported on an ongoing basis. – $ 28.0 million
We recommend the Legislature simplify and clarify the redevelopment pass-through process so that there are fewer future errors and increased property taxes for schools.

Redevelopment-Increase redevelopment K-14 pass-through requirements. – $ 200.0 million
Redevelopment increases state costs to fund K-14 districts. Requiring redevelopment agencies to pass-through an additional 5 percent of their tax increment revenues would partly offset this fiscal effect.