Elected officials from across Stanislaus County gathered Monday to send a message to Sacramento legislators: plans to end redevelopment agencies statewide aren’t just devastating to local economies, they’re also illegal.
The press conference, held in the Board of Supervisors’ chambers in downtown Modesto, was just one of many similar conferences held statewide on Monday, as municipalities up and down the state announced their support for a lawsuit intended to overturn the state’s plan to eliminate redevelopment unless large payments are issued.
The plan, approved as part of the state budget process, forces cities statewide to pay $1.7 billion to retain their Redevelopment Agencies – plus an additional $400 million annually. Those funds would be redirected to local public schools, in lieu of the state’s obligation.
“Many redevelopment agencies have notified us that they cannot afford the ransom payment and they will cease to exist,” said California Redevelopment Association Executive Director John Shirey. “And those agencies that are planning on making the payment tell us that these payments will greatly diminish their ability to pursue vital local projects.”
Under the state plan, Turlock would be required to pay the state $3.2 million to retain its redevelopment agency – a payment the agency cannot afford, according to Turlock officials.
Redevelopment agencies retain a share of local property tax income which would otherwise head to the state. RDA dollars may only be spent to reduce blight, to rehabilitate dilapidated areas, and to create low-income housing.
Without a redevelopment agency, Turlock would likely have to abandon the planned Avena Bella affordable housing project, effectively throwing away the $1.2 million already spent on the project for land acquisition and pre-development. Two proposed “job-creating projects,” offering almost 300 jobs in total, may be halted as well, as the companies may not relocate to Turlock without RDA assistance.
Eliminating the RDA would also curtail or halt graffiti abatement and code enforcement activities, which are currently funded by RDA dollars. As many as seven positions across Turlock could be eliminated, and as much as $225,000 in costs could be shifted to Turlock’s cash-strapped general fund budget.
“What the State of California is doing to our local governments is wrong,” said Virginia Madueno, mayor of Riverbank.
All representatives credited redevelopment funding for positive changes within their communities. In Modesto, RDA funding allowed for the revitalization of downtown and five affordable housing projects. Without it, the city will lose $6 million in funding per year and put hundreds out of work, eliminating development of the Kansas/Woodland Business Park and two affordable housing developments.
“What this is about is taking away the one tool local government has to help stir our economy,” said Brad Hawn, vice mayor of Modesto.
Turlock has said it will appeal the $3.2 million payment calculation, per the terms of the state bill, but even if Turlock does have its “ransom” reduced, the city will still face additional payments every year. Modesto’s calculations show a $1.8 million initial payment, plus $429,956 each year thereafter.
“We will fight in court,” said Luis Molina, mayor of Patterson. “We will not pay this ransom for now and for the future and indebt our community and the young people who come behind us.”
The CRA lawsuit, filed with the California Supreme Court on Monday, hopes to overturn the law before it can devastate local redevelopment agencies. As part of the legal motion, the RDA sought a stay to prevent the legislation from going into effect until the lawsuit is decided.
The core of the CRA argument lies with 2010’s Proposition 22, approved in November by 61 percent of voters. That constitutional amendment explicitly prohibits “seizing, diverting, shifting, borrowing, transferring, suspending, or otherwise taking or interfering with” revenue dedicated to local government, including redevelopment dollars.
“Proposition 22 couldn’t be more clear,” Turlock Mayor John Lazar said. “But the politicians in Sacramento aren’t listening.”
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