Jerry Brown’s plan to dismantle the state’s redevelopment agencies would make things a lot worse for San Jose’s staggering deficit—and eliminate the funding source for the salaries of Mayor Chuck Reed and the San Jose city council.
San Jose’s Redevelopment Agency (SJRA) spends $12 million per year to help pay for city staff—that’s over and above its own staffing budget. Almost 20 percent of that amount, $2.2 million, pays for the city of San Jose’s executive branch and its staff.
How did that happen, when RDA funds are, by law, reserved for capital projects to revitalize blighted parts of the city?
Executive Director Harry Mavrogenes says the expense is justified by the fact that the mayor and council sit as the city’s RDA board. If the governor succeeds in defunding the agency, the city would have to look elsewhere for that money—or tighten its belt considerably.
That may be exactly what the famously frugal governor has in mind.
While the governor’s plan contends that money for RDA projects should be going to cops and teachers instead, here as elsewhere, the Redevelopment Agency created its own revenue. It did so by forming special tax districts through a scheme known as tax-increment financing (TIF).
Critics throughout the state argue that San Jose and other California cities diverted this money and used it to build bureaucratic empires—including generous salaries for elected officials.
Another noticeable hole that would come as a result of Brown’s proposal would be seen on the 14th floor of City Hall, which is currently occupied by the SJRA. In addition to losing the $12 million per year that the redevelopment agency puts into the general fund, the city would lose out on $1.3 million in rent.
Read complete article ‘Mayor and Council Fight for Their Own Salaries’ at San Jose.com.