With the announcement of his proposed new budget, Gov. Jerry Brown is calling for the closing of the individual redevelopment agencies across the state, and tapping those redevelopment funds to fill a portion of the state budget gap.
Well, what exactly is “redevelopment?” Redevelopment is a format that is permitted under current state law whereby individual municipalities can form redevelopment project areas in areas of blight in order to provide planning and financing tools to eradicate that blight, and to improve infrastructure, do capital projects and create affordable housing.
An interesting part of redevelopment is that it is essentially self-funding. That is, no money from the General Fund of municipalities goes into the redevelopment agencies, nor does the state provide any funding. Rather, under redevelopment law, the existing property-tax base of a proposed redevelopment project area is determined and that amount of money (called the “tax base”) continues to be paid, in full, to all taxing authorities.