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A Report to the People of California, August, 1998 [ch11] 11 - Reclaiming Redevelopment Revenue Public money should be spent to serve and protect the public, not enrich private interests. The $1.5 billion in property taxes currently diverted by redevelopment agencies can be reclaimed to meet real human needs. And there is no greater need than that of our school children. State government has full powers over all 359 redevelopment agencies in California. Though administered locally, these agencies are legally and collectively an arm of state government, and can be reformed directly by the legislature or statewide initiative. Building shopping malls, auto dealerships and pro sports stadiums is a proper function of the free market. If there is a market for them, they will all be built, with or without government subsidy. Public education and public safety, however, are a state responsibility. We, the voters of California, have the power to redirect redevelopment funds back into serving the public, either through our legislative or ballot initiative. We should do so. Redevelopment debt could be paid off by liquidating agency assets, thus freeing up the property taxes to improve local schools and services. RETIRE DEBT: While long-term indebtedness exceeds $41 billion the actual principal on outstanding tax allocation bonds is only $8.5 billion, and could be paid off completely by liquidating existing agency assets (including cash, investments and real estate). Thus, the debt could be retired now, avoiding exorbitant future interest payment. PROPERTY TAX RESTORATION: With all redevelopment obligations met, the property taxes ($1.5 billion annually) could be returned to public education and local government. Currently Public Schools receive 57 percent of all property taxes statewide, Counties receive 21 percent, Cities receive 12 percent and Special Districts receive 10 percent (before redevelopment takes its share). Without redevelopment, the restored tax revenues would then be shared accordingly: Annual Revenue Gains by Public Entity With Restored Property Taxes K-12 Public Schools: 57% = $855 million Counties: 21% = $315 million Cities: 12% = $180 million Special Districts: 10% = $150 million Divided among our 5.6 million public school kids, this $855 million boost would lift per-student spending by $153 per year. California's annual per-pupil spending would jump from $5,284 to $5,437; from 32nd to 28th nationally pushing us past Kentucky, Montana, Illinois and Florida. Funding would flow to buy new textbooks, hire more teachers and expand after school programs. With an added $495 million, cities and counties could hire 7,000 more police and sheriff's officers, buy 20 million more library books, improve paramedic service or expand youth programs. Special districts could upgrade our aging water and sewer systems. This restoration of revenues for local needs could be done on a per-capital basis, so as not to lock in current county-by-county disparities in property tax allocation. Added, too would be additional property taxes from long-held agency properties now sold and returned to the tax rolls. The original rationale of redevelopment was to eliminate blight. It was a temporary fix for a temporary problem. Redevelopment agencies were never supposed to hoard an ever-growing slice of property taxes indefinitely. Let them share it now. More importantly, how better will blight really be eliminated? By building more commercial development? By encouraging California consumers to buy ever more merchandise? Or by better educating our children? What good are new NFL stadiums in San Francisco, Los Angeles or San Diego, if our kids can't read, write, add or subtract? There is growing bi-partisan consensus for reform in how local government is funded in California. A more rational apportionment of sales and property taxes would end current inter-governmental competition, and stabilize the current creaky system. It would compel commercial development to pay its own way thus reducing fees on new housing. Reclaiming property taxes long diverted to rede-velopment is an essential part of this reform. When redevelopment is fully understood, change will come quickly. When it is no longer The Unknown Government, policies promoting fiscal responsibility and free enterprise and fair play for all Californians will finally be restored. [TABLE OF CONTENTS] [RETURN to Main Page] Current Per-Student Expenditures (1996-97) 1. New Jersey $9,455 2 . Alaska $8,900 3. New York $8,658 4. Connecticut $8,376 5. RhodeIsland $7,665 6. Delaware7,086 7. Massachusetts $7,069 8. Pennsylvania $6,967 9. Michigan $6,954 10. Maryland $6,547 11. Wisconsin $6,521 12. Vermont $6,503 13. West Virginia $6,406 14. Maine $6,385 15. Minnesota $6,041 16. Wyoming $6,036 17. New Hampshire $6,014 18. Oregon $5,988 19. Virginia $5,920 20. I ndiana $5,886 21. Washington $5,805 22. Hawaii $5,720 23. Iowa $5,720 24. Georgia $5,585 25. Texas $5,551 26. Ohio $5,527 27. Kansas $5,493 28. Florida $5,427 29. Illinois $5,423 30. Montana $5,380 31. Kentucky $5,346 32. California $5,284 33. Alabama $5,255 34. Nebraska $5,250 35. Colorado $5,147 36. South Carolina $5,105 37. North Carolina $5,028 38. Nevada $4,998 39. Missouri $4,949 40. New Mexico $4,927 41. Tennessee $4,898 42. South Dakota $4,860 43. North Dakota $4,867 44. Louisana $4,527 45. Idaho $4,500 46. Mississippi $4,269 47. Oklahoma $4,187 48. Arkansas $4,172 49. Arizona $4,048 50. Utah $3,837 SOURCE: California Teachers' Association Per-Student Expenditures with Restored Property Taxes 1. New Jersey $9,455 2. Alaska8,900 3. New York $8,658 4. Connecticut $8,376 5. Rhode Island $7,665 6. Delaware $7,086 7. Massachusetts $7,069 8. Pennsylvania $6,967 9. Michigan $6,654 10. Maryland $6,547 11. Wisconsin $6,521 12. Vermont $6,503 13. West Virginia $6,406 14. Maine $6,385 15. Minnesota $6,041 16. Wyoming $6,036 17. New Hampshire $6,014 18. Oregon $5,988 19. Virginia $5,920 20. Indiana $5,886 21.Washington $5,805 22. Hawaii $5,720 23. Iowa $5,720 24. Georgia $5,585 25. Texas $5,551 26. Ohio $5,527 27. Kansas $5,493 28. California $5,284 29. Florida $5,427 30. Illinois $5,423 31. Montana $5,380 32. Kentucky $5,346 33. Alabama $5,255 34. Nebraska $5,250 35. Colorado $5,147 36. South Carolina $5,105 37. North Carolina $5,028 38. Nevada $4,998 39. Missouri $4,949 40. New Mexico $4,927 41. Tennessee $4,898 42. South Dakota $4,860 43. North Dakota $4,867 44. Louisana $4,527 45. Idaho $4,500 46. Mississippi $4,269 47. Oklahoma $4,187 48. Arkansas $4,172 49. Arizona $4,048 50. Utah $3,837 SOURCE: California Teachers' Association [TABLE OF CONTENTS] [RETURN to Main Page] |
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