STATE’S ‘ROBBING HOODS’ FACED HOBSON’S CHOICE

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, AUGUST 24, 2010, OR THEREAFTER

BY THOMAS D. ELIAS
“STATE’S ‘ROBBING HOODS’ FACED HOBSON’S CHOICE”

“Robbing Hoods,” one newspaper editor called the state legislators who voted last year to take $1.7 billion from city redevelopment agencies around the state and apply the funds to education.

That editor’s local RDA was forced to fork over $2.5 million during the spring as its share of the assessment.

The Poway RDA in San Diego County had to pony up $13.7 million and was unhappy enough to write the check under protest. Howls, in fact, came from all over California, where redevelopment officials griped that their money would not really go to schools, but in fact would go to the state’s general fund.

“This is not new money for the schools,” Jim Taubert, executive director of the Madera Redevelopment Agency, a lead plaintiff last year when the RDAs fought off a similar confiscation of some of their money, complained to a reporter. “(Schools) are just having redevelopment agencies pay for what they should have gotten from the state.”

That may literally be true, as the RDA checks were used to repay general fund money that had already been paid out to education. But the essence is that the funds have gone to schools.

TheRDAprotests have now evolved into Proposition 22, a November ballot proposition that would prohibit the state from “shifting, taking, borrowing or restricting the use of” tax money previously dedicated to local government services, redevelopment projects or transportation.

Many RDA boards are made up of the same persons who sit on city councils, so they are actually an arm of city government. They buy up older buildings and vacant property, then finance putting up new housing complexes and shopping malls on the land.

While opting to take money from the RDAs, legislators well knew the move could cost thousands of construction jobs by delaying development of housing, shopping malls and office buildings. What’s more, the confiscation made sure some areas designated as blighted would stay that way, as much of the construction done with RDA funds is in such places.

But legislators were in a tough spot: Looking at a $16 billion budget deficit last year, they knew that without the RDA funds, they would have to raise taxes in order to give schools the money to which they’re entitled under state law. But new taxes were not going to happen because of the two-thirds majority vote needed to OK any new levy and the fact that Republicans in the Legislature adamantly refuse to vote for any new tax, ever.

So it was either renege on the state’s obligation to schools or take money from agencies that build low-income housing and other developments badly needed in many cities.

That’s a classic Hobson’s choice where whatever decision legislators made was going to harm some valid, major public interest.

The state taking will unquestionably mean delays of projects that were set to begin in the next year or two and thus contribute to continued high unemployment.

But the other choice, underfunding schools which have already increased class sizes and cut days off their academic years, would have meant layoffs for thousands of teachers, diminished course offerings, fewer school libraries, counselors and nurses and a reduction in extracurricular activities like sports and drama.

No one wants to face a choice like that, especially Democratic lawmakers who usually rank both schools and union workers among their highest priorities.

But when money is short, people face uncomfortable choices, whether in a family where the main provider has lost a job, or in politics where making the wrong choice can get an officeholder thrown out.

Cities and RDAs, though, complain that the money the state took never came from the state in the first place. It stems from tax increment financing, where redeveloped properties that once were blighted are taxed at significantly higher levels than in their previous run-down incarnations.

The money is local, the cities maintain, and so it ought to stay home. They won with that claim in their 2009 lawsuit, but got a very different ruling when they made a similar assertion this year.

Even with the redevelopment agencies’ money, schools all over the state can only avert drastic cuts when they convince local voters to OK parcel taxes whose every nickel stays in the district where it was raised.

When educators forced to make those cuts look across town and see millions of dollars in the coffers of redevelopment agencies, many salivate. And they let legislators know that unless they get some of that money they’ll sic teachers unions, PTAs and other education activists on lawmakers who don’t cooperate.

RDAs and their supporters consider this banditry. But it’s not. Rather, it is politics in hard times when tough choices are forced on almost everyone in public office. Proposition 22 is likewise hardball politics, and we’ll know in November which side is stronger.

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Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net