by Winston Chua
SGV – A report by the Legislative Analyst’s Office for the state concluded that the loss of redevelopment agencies to the state may not have the big detrimental financial impact to the state that many had presumed.
Marianne O’Malley, managing principal analyst for a recent study released by the LAO, said that money will simply be redistributed. She does not foresee any significant change in the state’s overall tax revenue, but does concede that cities will have less access for revenue.
However, the lost of revenue from cities will be made up for by the increase in county tax revenue and the increase in tax revenue from special districts like water and fire.
Some may say that cities are at a disadvantage, say, if a prospective Costco were to come to town and not have some of the benefits a redevelopment agency might offer a new tenant. But O’Malley said that such businesses which create private sector jobs for the state will still come in to the state regardless, perhaps not in one specific area of the city.
Redevelopment agencies have helped specific communities, but the LAO believes that such businesses like hotels or retail outlets, which provide a somewhat limited source of growth to the economy, will still find a home in the state even sans redevelopment agencies.
Another argument for the elimination of RDAs is that some experts estimate $1 billion in savings while also relieving a chunk of the state’s burden to fund public schools.
Money saved by the elimination of RDAs will not go to the state, said O’Malley, but will instead take a greater percentage of taxpayer dollars and transfer said funds directly to schools. She said that there will be a longer term fiscal benefit to the state.
More on this article to come…
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