Category: California Redevelopment Agencies

Flap’s California Morning Collection: August 14, 2012

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Mission San Francisco de Asís

Good Tuesday morning!

The California Legislature is in session.  Today’s schedule is here.

The California Assembly’s Daily File is here and the California State Senate’s here.

On to today’s California headlines:

Judge orders changes to Prop. 32 language

A Sacramento County Superior Court judge on Monday ordered the secretary of state to change language on the November ballot describing Proposition 32, the initiative that promises to eliminate special-interest money in politics.

According to the new ballot label, the measure “prohibits” unions and corporations from contributing directly to candidates, as well as using payroll deduction to raise political cash. The label initially used the word “restricts.” The backers of Proposition 32 had argued that the original language, as determined by the attorney general’s office, was misleading.

“Voters deserve to be informed that Prop. 32 doesn’t just reduce direct contributions from corporations and unions to politicians, it eliminates them entirely,” said spokesman Jake Suski.

Judge Michael P. Kenny, however, denied another request by Proposition 32’s supporters to strike key language from the measure’s title and summary in state-printed voter materials. Backers had targeted a phrase that notes: “Other political expenditures remain unrestricted, including corporate expenditures from available resources not limited by payroll deduction prohibition.”

That’s the argument at the heart of the union-backed opposition campaign, which has been running statewide radio ads denouncing the initiative as “a deceptive proposition stuffed with special exemptions” for businesses.

Unions lost a separate challenge to ballot language that they said could mislead voters into thinking payroll deductions can be used with workers’ written permission. All payroll deduction is barred under the measure

ONLINE POKER: Legislation faces tough odds before deadline

Divisions among tribes with successful casinos have stacked the odds against legislation to legalize and license online poker in California, with less than three weeks left in the two-year session.

Some tribes support the proposal co-authored by the Senate’s top Democrat. Others support the concept but want changes to the legislation. And some tribes oppose the idea, saying it risks eating into the business of bricks-and-mortar casinos legalized by voters in 1998 and 2000.

Bill to close corporate tax loophole moves forward

Middle class Californians will get relief from soaring college costs if a bill passed by the Assembly Monday becomes law.

AB1500 would eliminate a $1 billion tax break for out-of-state corporations and use the expected windfall to reduce tuition.

It is the second component of Assembly Speaker John Perez’s “Middle Class Scholarship Act.” The Assembly previously approved the other part, which would reduce tuition by more than half for families whose annual household income exceeds the cap for getting a free ride at California’s public universities ($70,000 a year for the California State University system and $80,000 for University of California system) but is less than $150,000.

The Legislature approved the tax loophole in 2009 as a way to get a handful of Republican lawmakers to vote for the state budget.

On Monday, Republican Assembly members objected to what they described as an attempt by Democrats to undo the previous budget deal.

“This wasn’t a loophole, it was a product of careful, extensive negotiations and promises,” said Assemblyman Don Wagner, R-Irvine. “Promises made by one side of the aisle to secure the votes that they needed from the other side of the aisle. Promises that have now been completely undone.”

But Perez, D-Los Angeles, said there was no use preserving a two year-old status quo where “you are getting kicked in the head by other states.”

“This will help California businesses remain competitive while ensuring that California’s middle-class families have the same opportunities to succeed as our generation had,” he said.

The 2009 tax loophole deal allowed companies operating in multiple states to choose the cheaper of two formulas for calculating their tax liability in California. They can use an option that considers sales, property and payroll, or a formula that considers only sales.

Perez’s bill would force corporations to use only the sales factor. At least 11 other states, including Texas and New York, require that corporations calculate their tax obligations this way.

Last year, Gov. Jerry Brown, a Democrat, passed a single-sales requirement through the Assembly, but his measure failed to get GOP support in the Senate. Republicans say the change could drive job creating corporations out of California.

AB1500 passed the Assembly 54-25, barley meeting the two-thirds threshold. Assemblyman Brian Nestande, of Palm Desert, was the lone Republican supporter.

“I’m putting forth my vote to say we need to come together and work on some of these issues to bring businesses back to California,” he said.

Assemblyman Nathan Fletcher, an independent, also voted yes.

California scrambles to pay its bills with more borrowing

Embedded in a Monday report from the California controller is a statistic showing just how much the state is straining to pay its bills before November’s vote on higher taxes.

Controller John Chiang, who manages the state’s cash flow, finished July with more than $18 billion in outstanding loans after using high-speed accounting to cover day-to-day expenses. That means he would borrow some money from the state’s 500-plus “special” funds, used it to pay a bill and promised to repay it later when more tax revenue rolls in.

It’s a standard maneuver, especially at the beginning of the fiscal year, when expenses outpace revenues. But the controller leaned more heavily than usual on this tactic last month, tapping 81% of the money available for short-term borrowing, up from 48.4% in July 2011.

A spokesman for the controller, Jacob Roper, had a matter-of-fact explanation for the borrowing: “That’s the amount of special fund borrowing necessary to carry out the state’s budget.”

The $18 billion in outstanding loans includes $9.6 billion left over from June, as well as $8.5 billion in new borrowing in July.

Cities refuse to hand over redevelopment money

Twenty-seven cities have not forked over all of the redevelopment money the state says they owe, according to Gov. Jerry Brown’s administration.

The state says the cities owe $129 million total, but they’ve only returned $6.7 million.

The dispute involves an accounting shuffle that helps close the state’s $15.7-billion budget deficit. Because redevelopment agencies are being dissolved this year, Brown wants to shift $3.1 billion to schools, helping offset the state’s obligation to fund education.

Right now the state is trying to secure the first wave of money -– local tax revenue that officials say was mistakenly paid to redevelopment agencies in the first six months of 2012.

The Brown administration set a target of $685 million and has threatened financial penalties if cities don’t pay up, but they may not meet their goal.

“It may be half of that amount. It may be a third of that amount,” said Marianne O’Malley of the Legislative Analyst’s Office, which has repeatedly warned that there may not be as much redevelopment money available as expected.

Enjoy your morning!

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Flap’s California Morning Collection: May 7, 2012

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Mission San Fernando

Good Monday morning!

The California Legislature is in session.  Today’s schedule is here.

The California Assembly’s Daily File is here and the California State Senate’s here.

California Governor Jerry Brown will be attending a memorial honoring fallen police officers.

Gov. Jerry Brown joins law enforcement officials from throughout the state at Capitol Mall to remember fallen peace officers, including eight who died in 2011.

This is the 36th year for the annual memorial ceremony. In a statement released before last year’s memorial, Brown called it “a somber reminder of the bravery and valor of the men and women behind the badge who made the ultimate sacrifice to keep our communities safe.”

On to today’s California headlines:

 Schwarzenegger vs. GOP, for old times’ sake

Arnold Schwarzenegger has mostly stayed out of the political ring in California since packing his boxes and moving out of the state Capitol 16 months ago.

But he decided to throw a punch over the weekend at his fellow California Republicans — and the GOP faithful jabbed back.  In truth, both sides doth protest too much… and have done so already.  Multiple times, in fact.

Everything Schwarzenegger said in his weekend op-ed column in the Los Angeles Times had a familiar ring to it.  Even his anecdote about falling in love with the Republican party in the late 1960s, via a Richard Nixon speech, was a throwback to the rousing open of his August 2004 prime time speech to the Republican National Convention.

California controller seeks return of redevelopment agency property, assets transferred last year

Last November, San Jose gave the Oakland A’s an option to buy downtown land for a new ballpark. But the deal wasn’t intended simply to boost the stadium plan; it also aimed to protect the land from the state, which was seeking to nab the assets of city redevelopment agencies in order to plug its budget holes.

Now it appears the move may have come too late.

Other cities around the Bay Area made similar maneuvers to keep threatened projects alive, and they all may find those redevelopment-related deals in the state’s cross hairs as officials argue over the effective date of the law passed last year that ultimately killed the agencies.

Oakland city officials could be on the hook, although they insist they aren’t worried by their decision in March to sign a $3.5 million redevelopment-funded contract for planning work and an environmental impact review on a new coliseum project.

And in Santa Clara, officials say they are confident their contracts for the $1.2 billion 49ers stadium project that recently broke ground — and depended initially on up to $40 million in redevelopment agency funding — made it under an allowable time frame.

But state officials charged with implementing the law that shifted redevelopment agency property tax revenue from city projects to schools and other government programs say the law is clear: Any asset transferred last year from the redevelopment agencies to other government entities after Jan. 1, 2011,

about the time Gov. Jerry Brown’s plan to kill the agencies became known, through June 28, 2011, must be returned. And any contracts that redevelopment agencies signed with outside parties after June 28, the date Brown signed the law, also aren’t viable.

Californians to vote once again on modifying term-limits law

For the third time since Californians embraced some of the strictest term limits in the nation 22 years ago, opponents are imploring voters to loosen them.

This time, a carefully crafted initiative on the June ballot — one of only two statewide measures — has fans of the term-limits law worried.

At first glance, the measure appears strict: It would reduce the overall amount of time a lawmaker can serve in Sacramento from 14 years to 12. And its greatest political selling point is it wouldn’t benefit any current politicians, unlike two previous initiatives that voters rejected.

“This design carries with it less appearance of self-dealing and self-interest,” said Lew Uhler, a leading proponent of the 1990 term-limits initiative. “It will be more difficult to defeat.”

By shaving two years off the existing lifetime limit, Proposition 28 proponents were able to list it on the ballot as “Limits on Legislators’ Terms” — an alluring title, given the public’s continuing support for limits.

It certainly sounded good to Gilroy Republican Edwin Natividad. “I’m for it because I’m for term limits,” said Natividad, a 49-year-old postal carrier.

But the measure also allows lawmakers to spend all 12 years in one legislative house, doubling the amount of time Assembly members could serve there. They’re now limited to three two-year terms; senators are restricted to two four-year terms.

CEO Mag Taps CA Worst State to do Business – Again

Chief Executive Magazine’s annual survey of the Best & Worst states for business puts California in a familiar spot: #50. California was named the worst place to do business while Texas retained its position as the best.

The survey was conducted with 650 CEOs from across the country who were asked to evaluate states on a number of issues such as regulations, tax policies, workforce quality, educational resources, quality of living and infrastructure.

The magazine’s editor–in-chief, J.P. Donlon said, “CEOs tell us that California seems to be doing everything possible to drive business from the state.”

Enjoy your morning and here is Dan Walters Daily Video: California’s school system is languishing

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California Cities and Redevelopment Agencies To Hope for 2012 Compromise After Supreme Court Decision

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Thousand Oaks Civic Arts Plaza and City Hall funded by a Redevelopment Agency

They can hope but I do not think California Governor Jerry Brown has any incentive to compromise. The fact is that cities and their redevelopment agencies have been ripping off the State of California and other local agencies for decades.

The California Supreme Court on Thursday gave Gov. Jerry Brown and state lawmakers the right to eliminate community redevelopment agencies in a crucial victory on the state budget.

But the fate of the more than 400 redevelopment agencies remains unclear as cities—and even many lawmakers—vowed to seek a legislative compromise next year that would ensure the agencies’ survival.

Brown has little incentive to go along.

The court affirmed the state’s authority to dissolve the agencies, calling it “a proper exercise of the legislative power vested in the Legislature by the state constitution.” Doing so means more of the property taxes generated within redevelopment zones will go toward schools, law enforcement and other local services, freeing up as much as $1.7 billion in the state general fund during the current fiscal year. The money now is returned to the agencies to spend on future redevelopment projects.

Lawmakers and the mayors of several large cities said Thursday they were inclined to work out a compromise after the justices issued their split decision. While they affirmed the Legislature’s authority to dissolve redevelopment agencies, the justices in a unanimous decision invalidated companion legislation passed last summer that was intended to keep the agencies operating by forcing them to direct a certain amount of property tax revenue to schools and other services.

I wonder how the City of Thousand Oaks will be able to fund their redevelopment funded grandiose City Hall and Civic Auditorium?

Oh well, the Conejo Valley Schools should benefit.

But, wait, the schools funded two school based performance auditoriums with redevelopment funds.

What a complicated weave of shifting local tax-funding and that is what Jerry Brown wants to eliminate – plus balance his state budget.

Stay tuned….

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