Wednesday Jan 26 2011
City readies for fight over tax money
By: Jon Brines, Placer Herald Correspondent
City leaders are stepping up efforts to protect tax money used by the Rocklin Redevelopment Agency, which the state now wants to balance the budget. “People understand we’re watching this very closely,” Rocklin Mayor George Magnuson said. Gov. Jerry Brown proposed dismantling all of the state’s 400 redevelopment agencies. Right now, Rocklin gets about $5 million a year from property taxes for use in the redevelopment agency for things such as infrastructure projects, municipal bond debt, affordable housing set-asides and payments to schools and other entities, according to the city. At Tuesday’s Rocklin City Council meeting, members voted unanimously to pen a letter of protest from the council to the legislature. “Send it to any of the legislators that can read,” Councilman Peter Hill joked. On a more serious note, Councilman Scott Yuill said the city has properly benefited from the redevelopment process. “Protecting redevelopment funds is important because it is a tool that helps us,” Yuill said. They also voted to create a legal loan agreement in order to protect funds they extended to the city’s redevelopment agency to buy the new library building on Granite Drive. “We agreed to loan the redevelopment agency money to buy it,” Magnuson explained. “This is just formalizing it in case something comes down that says you did not have an exact document that meets our standards.” Since the proposal has been made public, Brown has been trying to stop cities statewide from making a mad dash to tie up idle redevelopment funds to prevent the cash from being reallocated by the state. Magnuson said the city is not going to do anything rash to tie up the funds Brown wants. He said Rocklin is more conservative. “What he is trying to freeze is the (tax) increments and not count on appreciation later. Which has been a problem lately (with the economy),” Magnuson said. “We’re not going to be like Los Angeles and go out and sell a lot of bonds to do stuff.” Monday, mayors from around the region met in Sacramento to protest the new budget proposal, but ironically Rocklin’s mayor said he couldn’t attend due to the city’s tight budget that has created a moratorium on travel. The movement was put on by the League of California Cities, which Rocklin is a member. The executive director of the League of California Cities Chris McKenzie said the new proposal is unconstitutional. “We are infuriated that once again the state is trying to balance its budget by raiding local funds,” McKenzie said. Prop. 22 approved by voters last November prohibited the state from taking or borrowing funds used for redevelopment services. It passed 62 percent to 39 percent. “The voters said, ‘State government — keep your hands off our local dollars,’” McKenzie said. McKenzie stopped short of calling for a lawsuit against the state, or another proposition, opting to challenge the legislature to somehow push the proposal through. “We hope sincerely this is looked at from a legal standpoint because it is seriously flawed,” McKenzie said. “We would hate to take this state to court to uphold the will of the voters but we will do it if we are forced to.” City Attorney Russell Hildebrand said if the governor is serious about dismantling redevelopment agencies, the legislature would most likely put it on the ballot with the proposed tax increases to make it legal. The California Redevelopment Association issued a report, which shows the future annual job losses in every county and every redevelopment agency area of the state if redevelopment is abolished could top 304,000 including an estimated 314 people who could be affected in Rocklin. That figure represents not only city staff but outside workers as well, according to the report. Magnuson said the proposal would hurt the city’s bottom line once again in a bad economy. “If it was just the Redevelopment Agency and they were going to lose that money, then those people could be out of a job,” Magnuson said. Magnuson said it’s unclear how many could be laid off in Rocklin because much of the staff multi-tasks for the city in other critical departments. “We don’t have a redevelopment agency like Sacramento. People multi-task,” Magnuson said. “Don’t forget, that just curtails the new projects. The old projects are still on the books and you still have to maintain those.” Hildebrand said he believes the impact could be less and simply force the city to restructure to get the city’s business done. “There are no real definitive answers,” Hildebrand said.