For about a year now, California Governor Jerry Brown has been working to close the state's budget gap through a series of spending cuts and tax increases.
One of his most controversial moves was to dissolve the state's Redevelopment Agencies (RDAs), which are responsible for most of the affordable housing development in California.
Governor Brown planned to shift the over $1 billion in funding from the RDAs into California's General Fund to help with its budget deficit.
Earlier this year, state Senators took a significant step towards bypassing his plans.
A California State Senate bill that was originally introduced in February of last year, and recently passed the Senate, would shift all authority and funding from RDAs to another entity.
Senate Bill 654 allows authority and money to be transferred either to the city, county, local housing authority or the Department of Housing and Community Development.
This transfer doesn't prevent RDAs from being dissolved, as outlined in Governor Brown's FY2012 budget, but it does prevent money already allocated to RDAs from being transferred to the state's General Fund.
SB 654 states clearly that money which had previously been under the control of an RDA "shall be maintained in a separate Low and Moderate Income Housing Fund and expended pursuant to the provisions of the Community Redevelopment Law relating to the Low and Moderate Income Housing Fund.
" This means that money previously allocated to RDAs for the development of low- and moderate-income housing or communities can still only be used for those purposes.
Redevelopment Agencies have been an integral part of housing development in California for decades.
There are over 400 RDAs throughout the state of California, and they have been nearly exclusively responsible for improvements in low-income and distressed neighborhoods.
Or, at least, they were prior to Governor Brown's legislative efforts.
One of the things Governor Brown's office didn't take into consideration was the debt incurred by many of the RDAs.
Most RDAs received loans either from private institutions or other government entities, and used that money for community improvement projects.
Once the projects were completed, property values often increased, which led to higher property taxes.
Those tax increases were directed to the RDAs and used to pay off their debt.
Now that the RDAs no longer exist, many improvement projects are on hold.
But loans still have to be paid.
Consequently, the $1 billion Governor Brown hoped to apply towards the state's budget may never reach the state treasury.
One of his most controversial moves was to dissolve the state's Redevelopment Agencies (RDAs), which are responsible for most of the affordable housing development in California.
Governor Brown planned to shift the over $1 billion in funding from the RDAs into California's General Fund to help with its budget deficit.
Earlier this year, state Senators took a significant step towards bypassing his plans.
A California State Senate bill that was originally introduced in February of last year, and recently passed the Senate, would shift all authority and funding from RDAs to another entity.
Senate Bill 654 allows authority and money to be transferred either to the city, county, local housing authority or the Department of Housing and Community Development.
This transfer doesn't prevent RDAs from being dissolved, as outlined in Governor Brown's FY2012 budget, but it does prevent money already allocated to RDAs from being transferred to the state's General Fund.
SB 654 states clearly that money which had previously been under the control of an RDA "shall be maintained in a separate Low and Moderate Income Housing Fund and expended pursuant to the provisions of the Community Redevelopment Law relating to the Low and Moderate Income Housing Fund.
" This means that money previously allocated to RDAs for the development of low- and moderate-income housing or communities can still only be used for those purposes.
Redevelopment Agencies have been an integral part of housing development in California for decades.
There are over 400 RDAs throughout the state of California, and they have been nearly exclusively responsible for improvements in low-income and distressed neighborhoods.
Or, at least, they were prior to Governor Brown's legislative efforts.
One of the things Governor Brown's office didn't take into consideration was the debt incurred by many of the RDAs.
Most RDAs received loans either from private institutions or other government entities, and used that money for community improvement projects.
Once the projects were completed, property values often increased, which led to higher property taxes.
Those tax increases were directed to the RDAs and used to pay off their debt.
Now that the RDAs no longer exist, many improvement projects are on hold.
But loans still have to be paid.
Consequently, the $1 billion Governor Brown hoped to apply towards the state's budget may never reach the state treasury.