The Number is 425

425. That’s the number of redevelopment agencies Governor Jerry Brown is proposing to eliminate.  He’s effectively throwing down the gauntlet, calling for their elimination in order to help close the widening budget gap.  CP&DR reports that such a move would free up about $5 billion in annual tax increments held by redevelopment agencies, with a little less than half going to pay off outstanding debts and the rest to be used for local services.

Essentially, tax increments are additional tax revenues generated by the development and improvement of a project site and surrounding areas.  In layperson terms, it’s the difference in the value of a project now, compared to it’s valuation before development.  In theory, with any new project the value added to the existing area and potential for future development should increase, thereby resulting in greater tax revenue.  As a common practice through the United States, redevelopment agencies are able to take these tax increments and use them to finance projects or pay off preexisting debt.
Among those vehemently denouncing the Governor’s plan are Mayor Antonio Villariagosa and Community Redevelopment Association-Los Angeles CEO, Chris Essel.  Essel remarked that Governor Brown is proposing to dismantle an economic tool that has a 60-year track record of success in creating jobs and stimulating economic activity across the state.
Los Angeles Downtown News published an article with a similar sentiment, the CRA was a key player in funding or financing Staples Center, the redevelopment of Bunker Hill, and dozens of affordable housing efforts. However, the article makes reference to the fact that Brown’s plan would reallocate money to cities and counties for education and public safety, which naturally would reduce the burden imposed on the state.
What’s your take? Is Brown’s plan hindering or a helping California?
Read On:
Governor Proposes Elimination Of Redevelopment Agencies
Mercury News editorial: Don’t dump redevelopment without a new job strategy
Gov. Brown’s Budget a Blow to Downtown Redevelopment
Brown’s plan would torpedo Great Park bonds
California Urged to Nip Redevelopment Bond Sales as Budget Scraps Agencies
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