ECONOMY - What New Governors Face

"New Governors Confront Daunting State Budget Woes"
PBS Newshour 1/3/2011

Excerpt from PBS Transcript

JERRY BROWN: The budget I present next week will be painful, but it will be an honest budget. The items of spending will be matched with available tax revenues. And specific proposals will be offered to realign key functions that are currently spread between state and local government in ways that are complex, confusing and inefficient. My goal is to achieve greater accountability and reduce the historic shifting of responsibility back and forth from one level of government to another.

At this stage of my life, I have not come here to embrace delay and denial.

Thank you Jerry. This WILL hurt, but the pain is necessary (unfortunately).

Having said that, anyone (state or federal level) who thinks you can balance a budget on JUST budget cuts is living in fantasyland. You need BOTH budget cuts and increased revenue (taxes).

AND from home.....

"The Plan That Could Kill SD's Dreams" by Liam Dillon, VoiceofSanDiego.org 1/3/2011

Excerpt

For 65 years, redevelopment has helped define how California pays to improve rundown communities. Under a proposal floated by new Gov. Jerry Brown, that might change.

Brown, who was sworn into office Monday, is considering eliminating redevelopment agencies statewide, according to the Sacramento Bee.

For San Diego, anything that would come close to eliminating redevelopment would lead to a profound change in how the city does business.

San Diego has used redevelopment subsidies to build some of its best known civic projects: revitalization of the city's Gaslamp Quarter and the development of the Horton Plaza mall and Petco Park. It's using redevelopment money to help finance the new $185 million main library and could need it to build a Chargers stadium and expand its Convention Center.

Redevelopment is designed to revitalize ailing communities. It allows municipalities to sequester property taxes, using that money to subsidize development and make public improvements. It's become fundamental to the state's tax structure. But redevelopment also takes property taxes that otherwise would go to schools, counties and municipalities' day-to-day budgets.

The governor could be considering redevelopment reform because the state is left picking up the tab for school funding that's lost when the tax money goes to a redevelopment area. About 400 redevelopment agencies exist in California and they collected $10.2 billion in revenues in 2008.

Brown, the Bee reported, wants to use redevelopment money to plug a hole in the state's $28 billion budget deficit and then redirect funding to counties and schools thereafter.

Similarly, there have been growing concerns that communities are using redevelopment money for the wrong reasons, said Michael Jenkins, a redevelopment attorney and former top San Diego redevelopment official. He wasn't surprised Brown was moving toward reform.

"The state has, for years, chafed at how the redevelopment law has placed an increasing burden of funding schools onto the state's general fund," Jenkins said. "It's a bigger issue than just that, but it's reflective of the fact that, to a large degree, local government is using redevelopment as a revenue source rather than as a means to eliminate blight."