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Jerry Brown Goes After Redevelopment in the Name of Schools

A letter from Action Alameda News publisher David Howard…

Governor Jerry Brown’s proposal to eliminate some 400+ redevelopment agencies across the state of California comes as the Alameda Unified School District reaches out to voters yet again for a parcel tax. Across the state, redevelopment agencies divert to development subsidies some $5 billion of local property taxes per year. (Source: State controller’s annual report on redevelopment agencies.)

Every time the Alameda Unified School District brings forth a parcel tax ballot measure, it blames the State of California for not fully funding schools. But, as Governor Brown has pointed out, the state-wide school funding problem starts with local redevelopment agencies diverting local property tax dollars away from schools. Contrary to popular misconception, local property tax dollars do not “go to the state” and get “apportioned back to local districts.” While revenue limit entitlements are set by complicated formulas determined by state law, in fact, each district’s revenue limit entitlement is filled first with local property taxes.

Any shortfall in property tax dollars is made up by the State of California, from revenue generated by income and sales taxes, up to the revenue limit entitlement. This current model, in effect, transfers wealth, through Sacramento, from non-redevelopment cities to redevelopment cities, as the State tries to make up for money lost to redevelopment agencies with funds from across the state. Increasingly, the State is being asked to make up revenue limit entitlements with money it does not have.

In Alameda, the problem is aggravated by the actions of certain local school board trustees, like the one that endorsed SunCal’s “Measure B” redevelopment plan for Alameda Point, which called for a $200 million property tax subsidy to SunCal, and another trustee that accepted a $5,000 political contribution from SunCal, while supposedly leading, as board president, the school board in negotiations with that same company for mitigation fees to be paid to the District as part of the Alameda Point redevelopment plan.

The City of Alameda’s redevelopment agency, the Community Improvement Commission of the City of Alameda, carries almost $300 million worth of redevelopment debt, which is paid back from property taxes diverted through the redevelopment mechanism, a.k.a. “tax increment financing.” The same agency receives as revenue some $15 million to $20 million each year in local property tax dollars. (Source: State Controller’s Annual Report on Redevelopment Agencies.) According to the Alameda County Tax Assessor’s Annual Report, 13 cents of every Alameda County tax dollar goes to redevelopment agencies.

The chart below show the breakdown of Alameda County property tax dollars between schools and redevelopment from fiscal year 2004-05 through fiscal year 2011-12. In FY 2006-07, schools in Alameda County received 47 cents of every local property tax dollar and redevelopment agencies received 9 cents. For 2011-12, schools will receive 41 cents of every dollar, and redevelopment agencies will receive 13 cents.

Alameda County Schools Share of Property Taxes

Alameda County Schools Share of Property Taxes

The Mercury News article quoted a redevelopment critic, a Pasadena lawyer named Christopher Sutton. According to the article:

Christopher Sutton, a Pasadena lawyer who has represented opponents of redevelopment projects, argues that what may have started as a good urban improvement idea has morphed into a growing monster. “What do you value more,” Sutton asked, “public education or subsidizing sports teams and developers?”

In Alameda, we know the answer to that question. The Alameda Unified School District clearly values subsidizing sports teams more than public education, as evidenced by the tax cap in Measure A, which would have the Oakland Raiders – their headquarters is on Bay Farm Island in Alameda – paying an effective tax rate of 8 cents/sq ft, compared to the average homeowner/parent, who would pay 32 cents/sq ft. Measure A would also lower the Raiders’ tax cap by 16% from $9,500/yr to $7,999/yr while increasing the parcel taxes on the median Alameda homeowner by 65% from $309/year to $512/year. (Source: Alameda Unified School District press release) A majority of Alameda City Council would seem too, to value subsidizing sports teams more than education, judging by their endorsement of Measure A, and continued use of the redevelopment mechanism within the city of Alameda.

Where does Proposition 13 fit in all of this? There is over $600 billion worth of land in California tied up in redevelopment projects and subject to the diversion of property taxes to redevelopment agencies. (Source: State Controller’s Annual Report on Redevelopment Agencies.) Any change or repeal of Proposition 13 will be a big financial boon to redevelopment agencies across the state, flooding their coffers with new tax money. Here’s a hint – look closely at who’s pushing for Proposition 13 reform. If there is to be any reform of Proposition 13, it must go hand-in-hand with redevelopment reform.

Fortunately, we have now in the Sacramento capitol building an administration that understands the problem clearly, and seems ready to face it head-on. Slowly bringing up the rear are the teachers’ unions. (Locally, myself and others have tried in the past to educate AUSD’s labor groups on the redevelopment problem, but they would hear none of it.) We should wish Governor Brown well in his attempt to eliminate, or at least wrestle into submission, the California redevelopment machine.

18 comments to Jerry Brown Goes After Redevelopment in the Name of Schools

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  • Moldtruth

    Great Job Jerry!!! Three Million of Tax payor money was given away for the cost of a dollar in the city of Poway to help a Toyota dealership that exposed employees to Toxic mold and has many of them on State disability after allowing them to work in a previously closed building. The owners of Toyota of Poway Vincent Castro and Troy Duhon were all to willing to take the handout of your tax dollars, while pushing injured employees out the back door and into State funded programs. Thank them by doing business elsewhere. http://www.moldtruth.wordpress.com

  • Moldtruth

    Three Million of Tax payor money was given away for the cost of a dollar in the city of Poway to help a Toyota dealership that exposed employees to Toxic mold and has many of them on State disability after allowing them to work in a previously closed building. The owners of Toyota of Poway Vincent Castro and Troy Duhon were all to willing to take the handout of your tax dollars, while pushing injured employees out the back door and into State funded programs. Thank them by doing business elsewhere. http://www.moldtruth.wordpress.com

  • Barb

    Redevelopment has given us the Ron Cowan Expressway, aka the Road to No Where, at at cost of tens of millions of dollars that could have gone to our schools. The only purpose this road serves is when residents of Alameda go to the Oakland Airport, they can skip the lights on Doolittle and make it to the Airport in 5 minutes less. Not worth one whit in terms of what it cost Alamedans generally.

    Only question is will the return of these funds reduce the need for the latest parcel tax? Is there a provision in Measure A to eliminate the new tax, if we get the redevelopment money back? This is exactly what Ann Marie Gallant was doing to help AUSD. Did Vital know about this before asking for the new tax?

  • dlm

    Thanks for the analysis. I’m still not certain what it means to “eliminate” redevelopment agencies. The bond debt that the agencies have will still have to be paid, so at least some of the existing tax increment will go to that purpose.

    So, I’m wondering if any remaining tax increment would then be directed to the municipal fund, rather than to other redevelopment projects or to affordable housing.

    I assume that most of the impact would be going forward, since new redevelopment projects could not be pursued. (And in that case, good!)

  • In alameda county, cities get 18 cents of every tax dollar currently. presumably that figure would rise.

  • Hot r

    No help is coming from the State. There are some problems with the constitutionality of a legislative takeaway given the passage of Prop 22 which bars taking away redevelopment funds by the State and even if successful all the funds will revert to the State at first and will never reach Alameda.

    It is much more likely that voters will have to approve this in a ballot measure. I can see the campaign now- Ca. Votes to halt development! That is a loser at the ballot box. Thus you’ve thrown out yet another RED HERRING!

    What’s wrong, have you lost faith in ” 32-1 ain’t fair”?

  • dlm

    Hot r — Gov. Brown “threw out this red herring” and continues to throw it out, so evidently he thinks it’s possible.

    I don’t think you’re understanding this. If the state shifts its obligations to the local level (county and city) as Brown has suggested, then it’s not taking away any funds, far from it. The plan is to leave both the money AND the bills at the local level.

    Also note that the state “backfills” (replaces) the school funding that’s lost to redevelopment and I don’t see anything in Prop. 22 that would compel the state to continue doing that. I do not want to see the schools lose that money — it would be a disaster — but the point is that they can put a great deal of pressure on voters to agree to a halt of redevelopment.

    In finally, if the state’s plan to eliminate redev agencies is tied up in lawsuits, as expected, that will still delay redev projects and redev bonds until those legal issues are resolved, which could take a long time.

  • Barb

    The most notable omission from JB’s proposal: unfunded retirement pensions for public employees with collective bargaining agreements. We can all give til we bleed, choosing to educate K-12 but bankrupting the UC and CALSTATE systems. At the same time paying an every growing cadre of prison guards, police and fire department personnel whose pensions can’t be touched. Retirement after 20 years at 90% of pay? How long does anyone really think that can go on?

  • dlm

    From SFGate:

    Redevelopment plans threatened by CA budget cuts

    Eliminating the two programs will save the state’s general fund nearly $2.7 billion over the next 18 months, money Brown plans to use to stave off deeper cuts to health care, trial courts and local services. In future years, the funding – which will increase as redevelopment projects are completed – will be given directly to schools, cities and counties as part of the new governor’s plan to bring government services closer to the people. To replace redevelopment funds, the new governor also wants to allow cities and counties to raise some taxes with the approval of 55 percent of voters.

    Mark Hill, a program budget manager with the state Department of Finance, said cities and counties will be able to move forward with projects in the future – they will just have to decide whether they want to use the former redevelopment funds for those purposes, or ask voters to approve taxes.

    Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/01/10/MN2P1H6U2L.DTL#ixzz1AlBB1rLJ

  • If the choice is between local schools and local redevelopment projects, I believe most of us would prefer it goes to the schools. If Vital hasn’t understood this now since our defeat of Measure E, she is even more incompetent than we thought. Mismanagement of the district now drives them to the hat-in-hand yet-another parcel tax, as if they have no imagination.

    And this is but one alternative! Lets suppose that many of the “drastic” cuts proposed, school closures, etc. are simply long overdue. Shrinking enrollment has never been met by cuts to under-enrolled schools, even with the loss of some 900 AUSD students since Base Closure.

    With the trust of Alameda voters severely strained by the new City Council majority, who did not receive a majority of votes, it is very unlikely that they will approve a 65% increase in school parcel taxes on the average homeowner with Measure A. Once that fails,Vital may have to level with the taxpayers, and proceed with her “Draconian cuts” in spending, on an annual budget now totaling over $90 million!

  • Hot r

    INCOMPETENT!
    MISMANAGEMENT!
    DID NOT RECEIVE A MAJORITY OF VOTES!
    90 MILLION!

    Does that sum it up Dennis? this what you said on Laurendo’s site…

    REFRESHING, that so many people are willing to admit voting for the Three Stooges, although most of those posting use fake names. CANDID up to a point, eh? The attempts at satire, while they fall short, indicate a willingness to be PLAYFUL. I only wish these folks had discovered CIVILITY six months ago, and respect for city leaders, including the City Attorney and the ICM. TIMING! The inspiration for HYPOCRISY, of course, comes from Lauren, as usual, the very Priestess of HATE, but apparently she has seen the light.
    Comment by Dennis Green — January 11, 2011 @ 2:50 pm

  • Hot R, thanks for the promo, and if readers here follow the link, they will see your satirical, overwrought and very unfunny call to arms. In the light of Tuscon, not very cool, and that’s why I wrote my little satire of your comments, which you have so graciously reproduced here.

  • Hot r

    Readers?

    Parody is a literary or artistic work that imitates the characteristic style of an author or a work for comic effect or ridicule. Satire is a literary work in which human vice or folly is attacked through irony, derision, or wit.

    The fact you don’t know the difference is why you were assigned to teach dumbbell English. Oh and I love your use of exclamation points for extra “emphasis”. Like when you write childlike things such as “This means war!” or “$90 million!” Did you teach your students that too?

    It is your use of the language of hate, so obvious in all your name calling, wild charges, and accusations on display in just this small sample which is the real shame.

  • dumbbell English

    Where is this specialized course on the AUSD curriculum? Or is this another way that the leadership of our schools shows their nurturing side, and how they care for differing learning styles? No wonder you are hiding behind a pseudonym, Hot R. People like you are why the school system is broken and always looking for money.

  • Anonymous

    It’s Dennis’s own term, Adam.

  • “Dumbell English” is what the students at UC campuses call Subject A, a course designed to help students become proficient in English Composition. Fully 65% of the graduates in the top 12% of those California public schools Hot R helps “manage” fail to pass the entrance exam in writing.

    Along with Shakespeare, Camus and Hemingway, I proudly taught Subject A for ten years at UC Santa Barbara, helping my students make up in ten weeks the deficiencies left by 12 years of public education. I taught everything from grammar to logic, and would be glad to give Hot R private lessons in the latter.

    If he claims that his dreadful imagery on Lauren’s site was parody, not satire, then he’s merely writing more self-satire, for what he wrote doesn’t echo anyone except his own sick mind and warped sense of humor. Not even Sarah Palin goes that far!

  • Anon

    Doesn’t matter what classes are taught at AUSD. It has too many bricks and too much mortar. Any district that has to spend $180,000 annually to recruit students, and $300,000 every six months on ballot measures just isn’t living in the real world like the rest of us. I am going to pay $791.00 in parcel tax for my 2 bedroom, 2 bath house, to compensate for the lack of quality education at AUSD. But only a couple years, then I am exempt!! And will not have to worry about these fishhead campaigns any longer. If it were a great district, AUSD would not have to spend money recruiting students. By the time most parents have learned what a mediocre district, AUSD, is, it is too late to get your children on track in good schools.

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