Thursday, May 5, 2011

California Redevelopment Agencies Refuse to Die

The San Jose Mercury News has this piece today on newfound optimism among boosters of California's 425 redevelopment agencies. Followers of California's budget negotiations may recall that Jerry Brown had proposed killing the RDAs as part of his balanced-budget plan, only to be rebuffed by Republicans in the Legislature. Yet their proponents continue to hold onto hope, and were heartened by a legislative counsel ruling this week declaring that one element of Brown's plan (requiring the agencies to reimburse the state for the costs of closing them down) is unconstitutional. Still, it seems to us like they might be whistling past the graveyard these days. Reasons why include:
  • The proposal to kill the RDAs is almost certain to reappear in the revised budget plan Brown delivers this month.
  • Two Senate bills aimed at keeping the RDAs alive both stalled in committee this week.
  • A March report from the state controller slammed them for, among other misdeeds, abuse of eminent domain, failing to pay roughly $33 million owed to public schools, and widespread corruption with respect to accounting and payroll practices, loans, and use of affordable-housing dollars.
  • The recent smackdown of questionable eminent domain practices in National City.
  • The growing scandal over questionable lending and misuse of federal housing funds in Montebello.
  • The breaking scandal in San Diego's Southeastern Economic Development Corp., where two former directors have been charged with five felony counts of embezzlement, conspiracy, and misuse of public funds for paying themselves hundreds of thousands in secret bonuses from the RDA.

All of these things will only make it harder for anyone in Sacramento to lie on the train tracks for the RDAs, but the broader point is that few government bodies in California are more deserving of elimination. As described in this excellent Reason piece, redevelopment agencies are a magnet for corrupt dealings between local bureaucrats, crony land developers, neighborhood activists, and labor unions, and generally waste taxpayer dollars on a massive scale while doing little to improve poor neighborhoods. The winds these days seem more than ever to be blowing against them, but the plain fact is that they're largely responsible for the mess they're in.

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