Last year the California State Legislature passed a law eliminating more than 400 redevelopment agencies statewide. Most of the $5 billion in property taxes that provided funding to those agencies will now be funneled to the state, counties and school districts.
The elimination of redevelopment agencies statewide was proposed by Governor Jerry Brown. The California Supreme Court recently denied a legal challenge seeking to stop the elimination of redevelopment agencies. Los Angeles County Supervisor Zev Yaroslavsky in a Los Angles Daily News article applauded the court’s decision, saying the agencies long ago stopped being a catalyst to reinvigorate blighted neighborhoods.
“Unfortunately, over the years it evolved into a honey pot that was tapped to underwrite billions of dollars worth of commercial and other for- profit projects that had nothing to do with reversing blight, but everything to do with subsidizing private real estate ventures that otherwise made no economic sense,” Yaroslavsky said. Some state legislators are seeking to delay the elimination of redevelopment agencies in California, it will be interesting to see what happens.
Meanwhile in New York State Governor Andrew Cuomo is taking a very different approach by supporting the expenditure of $1 billion in public funds to encourage economic development projects in Buffalo. The expenditure of significant government funds over the years through HUD, the Erie County Industrial Development Agency, the Buffalo Economic Renassiance Corporation, and the Buffalo Urban Renewal Agency has not been successful in improving the job situation in Buffalo.
Which raises the question should government be in the economic development business? What do you think?