Gov. Jerry Brown announced last week that he was considering cutting redevelopment agencies throughout the state to save $1.7 billion, but city officials are worried that elimination of its RDA will divert money away from the city once it is under state control.
RDAs are supposed to use property tax increments — money gained from improving and developing property — for the intent of eliminating blight in cities, funding public improvement and stimulating development. Opponents of RDAs, however, argue the system is rife with abuse and is used to transfer private property to corporate developers.
If the RDA elimination proceeds, any debt that RDAs currently have would be paid off and the money that normally would go to RDAs would be diverted to other public agencies such as schools. Barstow's RDA was running at a deficit of $273,707 as of June 30, 2010.
City officials worry that the state's control of local tax increment money would take control away from Barstow. The agency elimination would also affect the creation of new jobs, especially construction work, said Ron Rector, Barstow RDA Manager. Rector was unavailable for further comment on other effects of the proposed elimination of the agency on Tuesday.
Although city officials worry that the elimination of RDAs might hurt Barstow, Barstow Unified School District may receive extra money if Brown's proposal passes. BUSD could receive an extra $40,000 in unrestricted funding if RDAs are eliminated, said BUSD Superintendent Susan Levine.
"We'll take any money the state would like to give us," said Levine.
Rector did not know if any specific programs within the city would be affected if Barstow's RDA was eliminated, but said the city would have less of an opportunity to develop and reinvest in its infrastructure.
One city official said it would be hard for cities throughout the state to encourage private development without RDAs.
"I guess without [the RDA], you're just back to luring private businesses who are leery of California," said Tim Silva, chair of the Barstow Redevelopment Agency.
The Barstow RDA was just starting to take off until $1.3 million in funding was taken by the state last year, said Silva. He said the loss of the agency would cause problems for people who want to apply for the Mortgage Assistance Program or those who want to participate in the Facelift Program to improve the overall appearance of their home. Silva was unable to give details about the programs and calls to Rector went unanswered Tuesday.
The Mortgage Assistance Program helps with closing and down payment costs for first time home buyers, according to the city's website. The Facelift Program is designed to beautify neighborhoods by assisting with exterior repairs and improvements and has been used by several businesses.
Some of the businesses that have been helped by the Facelift Program in the past include Del Taco on Lenwood Road, Travelodge on East Main Street, Roy's Cafe on East Main Street, Barstow Office Supply on East Main Street, the 76 station on East Main Street, and First Baptist Church on Barstow Road.
Councilman Willie Hailey said he felt the RDA should be able to do much more to help the city, including building infrastructure within the city that would improve its overall appearance.
Officials at the California Redevelopment Agency said eliminating RDAs would have a devastating effect on the state.
"This budget proposal to eliminate redevelopment is more budget smoke and mirrors that will bring little financial gain for the state, but will cause widespread and significant economic pain in communities throughout California," said California Redevelopment Association Executive Director John Shirey in a statement last week. "It is another gimmick that will likely result in extensive litigation."
While those that are part of RDAs think the elimination of the agencies would hurt cities, opponents approved of Brown's proposal and hope that the agencies will be eliminated so schools and other public agencies can use the funds.
"Generally speaking, redevelopment is the most abused agency in the state," said Kris Vosburgh, executive director of the Howard Jarvis Taxpayers Association, which is a political organization that favors low taxes and minimal interference from the government.
Vosburgh said that many RDAs wind up as systems that allow city councils to pay off campaign contributors by seizing private land and turning it over to developers. He also said eliminating RDAs will put more money back into the system for essential services and property owners would also receive greater protection from their property being seized through eminent domain. Property tax money which is currently going to RDAs should go to public programs and schools, because RDAs often have very little accountability.
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