Last year, California Governor Jerry Brown persuaded the state legislature to shut down redevelopment districts whose use of tax-increment financing was eating into school and other local budgets and, by turn, into the state budget which was forced to make up for school losses to redevelopment. This year, the legislature has quietly been sneaking TIF back into the law.
Recall that TIF works by capturing all the growth in tax collections–whether that growth is due to new development or simply to inflation–and using that money to subsidize developers. Schools and other property-tax funded agencies lose because their costs increase, but their revenues within the TIF districts do not.
The legislature tried to make TIF more palatable to the governor by exempting schools. In other words, redevelopment districts would still be able to steal money from fire districts, water districts, sewer districts, and other property-tax dependent entities, but not from schools. Since schools are the only (or at least the main) ones that the state funds, the new “infrastructure development districts” can go back to their old ways of favoring certain developers (and certain kinds of development) without threatening the state budget.
Fortunately, at least a few writers are urging Brown to veto any bill that comes out of the legislature. I hope he does.