CA: Redevelopment agencies take on huge debt to shield tax dollars from state

Sac Bee ^ | March 11, 2011 | Robert Lewis

[calcowgirl]

Local redevelopment agencies have pushed through nearly $690 million in bonds sales during the first two months of this year -- that's more than half of the $1.2 billion in debt those agencies took on in all of 2010, according to figures the state treasurer's office compiled.

Furthermore, given the shaky market, local governments are borrowing money at high rates -- increasing the amount of property tax revenue that will go to lenders, said Tom Dresslar, a treasury department spokesman.

"They're flooding the market with these bonds at a time when the market sucks from an issuer's perspective," Dresslar said.

The rush to take on debt comes as Gov. Jerry Brown is proposing to eliminate redevelopment agencies in an effort to help balance the budget. The finance department estimates such a cut would close $1.7 billion of the state's $26.6 billion deficit.

So how does taking on debt stop a state grab? To understand that question, you first need to look at how redevelopment agencies work.

The nearly 400 redevelopment agencies are in charge of redeveloping blighted areas. When an agency sets up a redevelopment area, officials will often borrow money by issuing bonds. This money then goes to pay for redevelopment projects.

(snip)

By fast tracking projects and pushing through bonds, these cities and their redevelopment agencies are trying to essentially tie up as much money as they can before they lose the current financing mechanism.

[calcowgirl]

Bless their little hearts. Just looking out for their blighted communities, I'm sure.

Grrrr...

[NormsRevenge]

but.. but..

The blob lives..
don’t miss
Charlie Sheen
in
Platoon 2 : The West Wing Years

The Good Times are over so it’s a catch as one can scene..

San Jose has sure done OK redevelopment dough wise.. and squandered a pile..