End of redevelopment?
SOUTH LAKE TAHOE, Calif. – Redevelopment, probation, human services and Lake Tahoe Community College could bear much of the local share of “vast and historic” changes to California’s government proposed by Gov. Jerry Brown this week.
The newly-elected governor proposed $12.5 billion in spending cuts Monday, while proposing to shift many state services to cities and counties in an attempt to “allow government at all levels to focus on core functions and become more efficient and less expensive.”
“These cuts will be painful, requiring sacrifice from every sector of the state, but we have no choice,” Brown said during a press conference Monday. “For 10 years, we’ve had budget gimmicks and tricks that pushed us deep into debt. We must now return California to fiscal responsibility and get our state on the road to economic recovery and job growth.”
The administration estimates the proposal would cut California’s projected $14.4 billion deficit for the 2010-2011 fiscal year in half and leave the state with a $1 billion surplus by the end of 2011-2012.
One of the most dramatic proposals in Brown’s plan is the dissolution of the state’s 425 redevelopment agencies.
If approved, the proposal would transfer redevelopment agency revenues to local successor agencies, which would use the funds to retire redevelopment debts and contractual obligations.
“Redevelopment has done some important things and we don’t – I don’t – want to interfere with any redevelopment bond or commitment that has been contractually entered into,” Brown said Monday. “But going forward, the redevelopment takes money from schools, cities, and counties, and we want that money to be available, because all that’s happened in the redevelopment is that the state has to backfill and pay to make up for the property taxes that are taken by redevelopment. So, in effect, what we’re doing here is spending money at the local level that the state doesn’t have.”
The successor agencies would also be required to shift any unspent redevelopment housing funds to local housing authorities for low- and moderate-income housing, make payments offsetting Medi-Cal and trial court costs, allocate $1.1 billion for “pass through” costs to schools and local agencies and distribute $210 million to cities counties and special districts.
The full ramifications of the budget proposal on South Lake Tahoe’s redevelopment areas are unclear, said Redevelopment Director Gene Palazzo Tuesday.
Palazzo said he had yet to see details of the governor’s proposal, but said passage of the proposal could keep the newly approved redevelopment area centered at the “Y” from ever getting off the ground, and jeopardize one potential revenue stream for the stalled convention center project at the state line.
Eliminating the redevelopment agency would also be detrimental to job creation and the South Shore economy as a whole, Palazzo said.
California Redevelopment Association Executive Director John Shirley predicted “economic pain” if the proposal passes legislative scrutiny. He also vowed litigation in a Monday statement.
“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,” Shirley said. “It is another gimmick that will likely result in extensive litigation.”
But the value of redevelopment agencies was questioned by the non-partisan, state agency the Legislative Analyst’s Office in an analysis of Brown’s proposal.
“The Governor also puts forward dramatic changes in the area of local economic development by proposing the elimination of redevelopment agencies,” according to the analysis.
“We think this makes sense, as the state’s costs associated with redevelopment have grown markedly over the years even though there is no reliable evidence that the program improves overall economic performance in the state.”
South Lake Tahoe City Manager Tony O’Rourke said he is concerned with the proposal to eliminate redevelopment agencies, but cautioned against putting too much stock in Brown’s proposal. Brown’s proposal is likely to see numerous changes prior to any kind of approval, O’Rourke said.
City staff will be meeting during the next several days to take a closer look at the local ramifications of the plan.
One of the major concerns from the city is that the state will shift responsibility for programs without corresponding increases in funding, O’Rourke said.
How the shifts in responsibilities to local jurisdictions will be funded after five years has yet to be determined.
Brown’s proposal would also have wide-ranging effects on services provided by El Dorado County, according to a Tuesday report to the Board of Supervisors by Principal Administrative Analyst Laura Schwartz.
The realignment would make the county responsible for California’s welfare-to-work program, food stamp administration and child support.
Eligibility for the welfare-to-work program would be cut from 60 months to 48 months, “placing more families further into poverty” and making them more reliant upon nonprofit community services and churches, according to the report.
What the county’s role in foster care and child welfare would be under the proposal is unclear.
The county would also lose its multipurpose senior service program under the proposal.
Three staff from the program would be laid off and more people would have to go into residential care sooner, according to the report. The program serves about 800 clients per year.
Brown’s proposal would also eliminate $28,500 in federal support for county veteran services and take away $60,000 from the county’s library budget.
But the county’s Probation Department could be “one of the very most impacted County Departments,” according to Chief Probation Officer Greg Sly.
In a letter to the county’s Chief Administrative Office, Sly said juvenile probation programs could lose $832,500, including $45,000 in treatment funding for the Juvenile Treatment Center’s Challenge Ranch Program.
Loss of the funding could place the challenge program at risk and cause the county to seek outside ranch programs at a cost of more than $500,000 annually.
The county would also be required to take over supervision of about 350 adult parolees, including 75 at the South Shore, Sly said. A new division and new equipment would be needed to handle the additional responsibility.
“However, this issue is far larger and will include residential placement and treatment requirements for parolees, medical considerations, sex offender populations, legal representation during revocations and jail impacts,” Sly said. “Exact impacts will depend on the model the State Legislature would actually enact in the law addressing this realignment.”
“Local jail facilities, the Juvenile Hall and the (Juvenile Treatment Center) will also be greatly impacted.” Sly said. “The jails will most likely experience over-population with numbers far greater than historically experienced.”
Like O’Rourke, Lake Tahoe Community College spokeswoman Christina Proctor cautioned against getting too worked up by Brown’s proposal, noting the actual budget is likely to differ substantially from the proposal.
She said the college is also still examining the plan to determine its local impacts.
The proposal includes increasing fees at California community colleges by $10 per unit.
Because the community college is on the quarter system, the per-unit increase would be less, but would still be equivalent to what colleges on the semester schedule experience, Proctor said.
The $400 million cut to community colleges statewide will eliminate funding for 90,500 full-time students through an “accounting gimmick,” according to a letter to community colleges from Scott Lay, president and CEO of the Community College League of California.
The league appreciates the honesty with which the governor has approached the budget, but said it will resist the cuts because they will likely reduce math and science classes and harm “the most vulnerable students,” Lay said in a separate statement.
“My liberal friends will abhor this budget for the proposed cuts to welfare, health care and support and services for disabled Californians,” Lay said in the letter. “My conservative friends will argue that the proposed tax extensions will only delay California’s economic recovery. Each of these perspectives are correct to some extent. However, I believe that mainstream public opinion will quickly reach the conclusion that only through a combination of cuts and revenue increases will this structural problem be corrected so that we, as one California, can once again believe better days are ahead.”