San Diego Unseen: An Urban Portrait
Kevin Faulconer
- Photo by David Rolland
San Diego City Councilmember Kevin Faulconer two weeks ago urged his colleagues to take a stand against Gov. Jerry Brown’s proposal to dissolve redevelopment agencies up and down the state, part of Brown’s plan to eliminate a $25.4-billion budget deficit. Some $1.7 billion would be shifted from redevelopment to help pay for Medi-Cal and trial courts.
“It’s not San Diego’s job to bail out the state,” Faulconer griped. “We cannot sit and watch the state raid our local tax dollars to fix its chronic budget problems.”
We understand Faulconer’s desire to hang on to precious dollars. But to claim that redevelopment money belongs to San Diego is misleading. At best, it’s merely one way to look at it.
Here’s another, more accurate way to look at it: Redevelopment money is statewide taxpayer money that the state has for decades allowed cities to use to spur economic development. Cities identify rundown neighborhoods and sell bonds to raise money for new projects, often handing the money over to private developers. Those projects generate increased property-tax revenue, which is then used to pay off the bond debt, spur additional development and, by law, finance affordable housing. As long as the redevelopment area exists, that increase in tax revenue stays there, rather than going where it would otherwise go: schools, the county, the city’s general-purpose fund and some special districts.
In some places, such as downtown San Diego, redevelopment has done well. In other places, it’s been abused to strike sweetheart deals with developers. San Diego is in danger of moving into the latter category if it uses redevelopment money to finance a football stadium. In any case, Brown has decided that, at the moment, it’s more important to save statefunded services than continue to spur economic development at the local level. Even with the shift in redevelopment money, Brown proposes billions of dollars’ worth of cuts to social services and higher education.
The state’s nonpartisan Legislative Analyst’s Office (LAO) has concluded that there’s “no reliable evidence” that redevelopment projects “increase overall economic development in California.” In other words, it probably shifts prosperity from one area of the state to the other, which is good for some cities, but a wash for the state. Brown rightly said in his State of the State speech on Monday that redevelopment money is state money, and there are priorities. “So, it is a matter of hard choices,” he said, “and I come down on the side of those who believe that core functions of government must be funded first.”
The only way for folks like Faulconer to argue that redevelopment money is not state money is by arguing that the state can never reassess priorities and that it can’t reverse course on fiscal policy based on changing circumstances.
Having said all that, we’re not certain that $1.7 billion is worth the trouble, especially since it’s not a given that the windfall would be that high— redevelopment agencies in San Diego and beyond are, understandably, feverishly trying to spend money before they lose it. That’s why the LAO urged the Legislature to urgently pass a law freezing redevelopment money. In our view, that would be a shame because San Diego would lose funding for worthy projects— such as a homeless-services center and waterfront beautification—that have been in the pipeline for, in some cases, years.
Far more important to Brown’s plan is roughly $12 billion in revenue that’s subject to voter approval—most of which involves the extension of temporary tax increases passed two years ago. He might legally be able to do an end-run around lawmakers and go straight to the voters, but he’d rather do it with two-thirds of the Legislature behind him. That route requires approval from a handful of Republicans, who so far have given Brown’s plan an icy reception, along with nonspecific calls to save money by reforming public-sector pensions. These Republicans say they’re certain that voters will reject the tax extensions. But if they’re so sure, what are they afraid of ? Why are they against the public issuing guidance on fiscal priorities?
It would seem prudent for local-government officials who happen to be Republican, like Faulconer, to push Republican state legislators, like, say, Assemblymember Nathan Fletcher, to help put the tax extensions on the ballot. Maybe some legislators—like Fletcher, who might become the next mayor of San Diego—see value in redevelopment and could perhaps strike a deal with Brown to take it off the table.
What do you think? Write to editor@sdcitybeat.com.
