Redevelopment Might Really be a Goner

Redevelopment Might Really be a Goner

Hours before the Wednesday midnight deadline for passing a state budget, legislative Democrats rammed through a ridiculous, gimmick-laden, majority-vote spending plan that failed to reform anything and failed to impress Gov. Jerry Brown, who wisely vetoed it less than a day later.

The budget succeeded mainly in one area:ensuring the legislators would continue to get their paychecks, given that an initiative passed by voters last year, Proposition 25, would have denied them their pay for every day after a missed budget deadline.

Brown might do another good thing that would give California property owners reason to celebrate: sign the trailer bills that would eliminate the state’s noxious redevelopment agencies. There’s been debate in the Capitol about whether his budget veto affects the redevelopment trailer bills, but the latest information from Assembly Republicans is that they can be signed or vetoed separately.

Previous efforts to kill these local central-planning fiefdoms —- which run up debt, divert existing tax dollars from traditional public services such as schools and public safety, abuse eminent domain and dole out subsidies to politically savvy developers —- failed after Republicans rallied to save the agencies, their free-market rhetoric notwithstanding. But on Wednesday, the Legislature voted to end their reign of terror, with a handful of Republicans joining Democrats in doing the right thing.

Past efforts to kill redevelopment failed when the bill required a two-thirds majority vote, but on Wednesday a version stripped of its appropriations provisions came before both houses of the Legislature for a simple majority vote.

AB 26x would “dissolve all redevelopment agencies and community development agencies in existence and designate successor agencies … .”

A companion bill, AB 27x, was a sop to weak-in-the-knees Democrats afraid to kill these agencies outright. It allows the agencies to come back into existence provided they pay a large portion of the revenue they collect to schools, fire protection agencies and other agencies from which they divert funds. That’s problematic, but as news reports suggest, city officials don’t think they have the cash to allow their agencies to rise again like those zombies in a cheap horror flick.

San Jose Mayor Chuck Reed complained in published reports that such a payback provision is “an impossible demand to meet.” Given the abusive and wasteful actions of redevelopment in that city and elsewhere, California property owners should be relieved that Reed and other redevelopment advocates are upset. “The Senate and the Assembly just voted to kill redevelopment, plain and simple,” the California Redevelopment Association’s John Shirey told the media. The governor has yet to sign (or even receive) the bills and this could all end up in court, but Shirey is not crying wolf.

The redevelopment industry suffered an enormous defeat, despite its bevy of lobbyists. Prior to the vote, Republican Rep. Tom McClintock of Rocklin, and one of the state’s conservative icons, released a short video urging Republicans to join with Democrats to kill these agencies.

Yet, even though any serious conservative should agree with McClintock and be eager to kill these agencies, which epitomize crony capitalism and central planning, Republicans were the biggest obstacle to their elimination. They found various reasons to support them, ranging from the desire not to give Brown any sort of budget victory to the oft-stated claim that redevelopment at least keeps the money in the hands of cities rather than in Sacramento.

In reality, many Republican legislators are more interested in being pro-business than pro-freedom and they have become addicted to the redevelopment cash and the political support from developers who benefit from the process.

On the Assembly floor Wednesday, Assemblyman Don Wagner, R-Irvine, rightly compared redevelopment tactics to the Mafia —- thus sparking a schoolyardlike scuffle on the floor from an Italian-American assemblyman, who demanded an apology on behalf of his fellow Italians —- but then opposed the legislation because it still allowed RDAs to come back into existence. I’ve never heard a Republican refuse to support a tax cut because there was still a possibility that the Legislature could come back and raise taxes again in the future. When it comes to redevelopment, Wagner and other Republicans contorted logic to defend these agencies.

Obviously, Democrats didn’t vote to shut down redevelopment agencies for the right reasons. They don’t mind central planning and subsidies. If they didn’t like those things, they wouldn’t be Democrats. They are looking for cash to close the budget hole. But who cares? Principled politicians find allies wherever they can find them, even if such alliances are fleeting.

There were some genuine heroes. Sen. Ted Gaines of Roseville was the only Republican to vote to end the agencies in the Senate, thus providing the swing vote. His wife, Beth, a newly elected assemblywoman, joined Chris Norby of Fullerton, Jim Nielsen of Gerber, Dan Logue of Linda and Allan Mansoor of Costa Mesa in voting to kill these agencies.

I loved what Beth Gaines said in her floor speech: “Redevelopment agencies were first created to clean up blight and improve infrastructure, and while some have completed very successful projects in their communities, unfortunately today, many use these state-subsidies as slush funds to seize private property through eminent domain and supplement other general fund expenditures, with little accountability to taxpayers.”

This redevelopment vote separates the Republicans In Rhetoric Only from the real ones, so note the small size of the Republican list.

Good for Gov. Brown for quickly rejecting the Democrats’ scam budget, even though he is sticking to his playback calling for tax extensions as the only solution to the state’s problems. Still, whatever emerges from this budget drama will have a short-term effect on the state.

The budget won’t be fixed until Californians elect politicians willing to exert some fiscal discipline. But the death of redevelopment —- and I believe Shirey that these votes really would have meant their death —- would be a great advance for fiscal responsibility and property rights and could give Brown a serious legacy.

However this plays out, redevelopment is on the ropes. That is a reason to celebrate.

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Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.