The City of Goleta’s redevelopment agency gave $811,609 to the state last week in order to help mend California’s depleted budget.
The municipality was one of numerous local governments across California that has been compelled by the state to hand over large sums of redevelopment money during the next two years. In fact, the state plans to generate over $2 billion in total from California cities and counties during that time.
According to the California Redevelopment Association executive director John Shirey, all state development municipalities will also be required to transfer an additional payment in the near future, as the state is still asking for around $300 million in total from CRA municipalities.
However, Shirey said, the amount of money already repossessed by the state constituted a grave hit to these agencies’ budgets.
“The mandatory transfer of funds [last] Monday was $1.7 billion and that’s just one of them,” Shirey said. “This represents about one-third of the money that these agencies have, and in some instances it accounts for more.”
These redevelopment agencies allow local governments to get rid of urban decay and crumbling neighborhoods by designating specific areas for redevelopment. Under state law, municipalities can then keep a portion of area property taxes in order subsidize construction of new housing and community projects, rather than giving the tax revenue to the state.
But in the wake of a massive state budget deficit, California lawmakers approved a bill last summer requiring local governments to turn over their redevelopment funds. A Sacramento judge approved the law earlier this month, forcing redevelopment agencies to turn over the money.
Shirey said taking the money from local governments would cause them to stop most redevelopment construction projects.
“Behind those projects are real people,” Shirey said. “In a typical year, we support over 300,000 jobs. Those dollars won’t be available in economic stimulus and putting people to work … We see this take of funds as an anti-economic stimulus.”
Shirey said the state is currently experiencing 12 percent unemployment, with 30 percent of construction workers categorized as jobless.
State legislators have told redevelopment agencies their money will go toward a state fund designed to redistribute money to public schools. But according to Jamie Valdez, an analyst with Goleta’s redevelopment agency, Goleta’s specified redevelopment region has no schools.
“There’s a certain willingness to pay for something that claims it benefits education,” Valdez said. “There are no public schools in Old Town Goleta, so it seems strange that the state can say that they are doing this to supplement education.”
According to Shirey, the state’s repossessing of redevelopment funds is an attempt by California’s leaders to avoid its financial obligations — a move that he said violates the state Constitution. Shirey said the state already sends money to school districts through property taxes so that distributing new allocations would cause distortions in funding, leaving some schools to receive relatively less money.
“Our money is raised locally and paid locally and never goes to the state, but the state is saying that they want our money so they don’t have to meet their obligations,” Shirey said.