With the passage of Senate Bill 654 (SB654), authored by Senate President Pro tem Darrell Steinberg, cities in California would retain Redevelopment Agency’s (RDA) tax increment financing to build more affordable housing. The entire Legislature is set to vote on the bill.
As we know, the Supreme Court terminated the RDA tax increment statewide. One major reason behind Gov. Jerry Brown’s action is to use the tax increment monies to pay down the state’s deficit and to help avoid further cuts to public schools. If SB654 passes, the state would have less money for education and less funding to curtail the deficit. Further, not only would the state have less money for the governor’s goals, but, in some cases, California would also add in a new level of bureaucracy, because cities would form a new Housing Authority or an expansion of an existing Housing Authority with roles being filled by city councils.
From my perspective, the highest court in the state ruled RDA can be terminated and allowed for a one-time exemption, which done the San Jose way does not pay property tax, road paving fees and up until recently no park fees. If anything, we should make an exemption for transportation projects that have more economic impact. For example, RDA funded the completion of Highway 87.
The other can of worms this opens is it attempts at re-prioritizing the enforceable obligations. Enforceable obligations is a list of who gets paid back first. My priority is to first pay back anything borrowed from a general fund that was borrowed to pay off the state grab, because that has an impact on services that are in the city charter. Housing is not in the charter, but police and libraries are and they should have a higher priority.
If SB654 passes through the Legislature, I hope Gov. Brown vetoes it. Then, moving forward when providing incentives/funding for affordable housing, the goal should be quality not quantity. This way we can build a community with a tax base to pay for city services and open space for residents to enjoy.
And on an unrelated note, thank you to Innovation Games, whose two dozen facilitators volunteered their time to the city of San Jose on Saturday allowing residents to discuss and select priorities under a budget simulation. The output from the 100 San Jose residents will be discussed at the Feb. 13 City Council meeting.