California cities are going on wild spending spree 

Gov. Jerry Brown has been caught flat-footed in his plan to shutter the state’s redevelopment agencies as cities across California continue to squander their redevelopment cash, tying up hundreds of millions of dollars in long-term spending on half-baked projects simply to keep the money away from the state.

A recent Pasadena Star-News article captured the absurdity of what’s going on: “Rosemead officials may or may not want a skate park, but one thing is certain — they don’t want the state to get any of the money the city would use to build it. So last week City Council members put the skate park ... on a list of projects slated to be funded with city redevelopment funds.”

Cities are spending money on projects they don’t even need or want — simply to keep the cash away from the state. State Treasurer Bill Lockyer rightly complained, after the Los Angeles community redevelopment agency took the first step in diverting $930 million in redevelopment funds to the city, that cities should engage in discussion rather than engage in “provocative acts of gamesmanship.”

I do expect many of these hasty approvals to go to court to challenge whether these emergency expenditures really are emergencies. I also expect that these agencies didn’t dot all their “I”s and cross all their “T”s, which is paramount in the redevelopment approval process. Where’s the new attorney general when you need her?

This is an outrage, a misuse of public funds that deserves additional state scrutiny from a state auditor who already is looking at how 18 agencies have previously spent their dollars. Still, state officials need to freeze those funds now given how unrepentant cities are about doing this. City officials I’ve talked to insist that because the governor’s plan is unfair to them, they are doing what’s best for their communities. Others say they are finishing up started projects — but it all depends on what one means by started given that the paperwork on these plans goes on for years. I’m guessing that some of these are as much “started” as some of those projects funded by federal stimulus funds were “shovel ready.”

About 60 years ago, California legislators allowed localities to start redevelopment agencies to eliminate blight in downtrodden urban areas.

The agencies target an area within their cities, determine that it is “blighted,” and then float bonds to pay for upgrades in the area. The redevelopment agencies gain the tax increment — the increase in property tax dollars after the area is formed. Those dollars pay off the debt.

Over the years, cities have turned to redevelopment to fill their general fund budgets with sales taxes and bed taxes. They use their enhanced eminent domain powers to provide cheap land to developers, who then build projects that bring in tax revenue.

This is costly to the state government, which backfills the property taxes diverted from schools and public safety. But this process has distorted land use in California as well. I have nothing against shopping centers, but they should pay their own way and buy land from willing sellers.

Redevelopment shifts decision-making from free individuals to government planners,, which is reason enough to shut down these agencies. The dollar savings are just an added benefit. And many agencies’ recent fiscal irresponsibility should remind us that they should not be trusted with public funds.

Steven Greenhut is editor of www.calwatchdog.com; write to him at sgreenhut@calwatchdog.com.

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