“Building better communities” was the slogan of the California Redevelopment Association. But the critics charged that redevelopment agencies “deprived tens of thousands of working and lower-income residents of their homes and livelihoods while granting vast subsidies to billionaires.” In the end, the social justice questions didn’t matter, but the subsidies did, so to save the state billions of dollars a year, California redevelopment agencies shut down for good last week.
The agencies had $30 billion worth of outstanding debts to private parties which will still be repaid out of tax-increment finance (TIF) revenues. But these repayments will only use about half of the $5.7 billion in TIF revenues the agencies collected each year, so now the other half will be returned to schools and other entities that rely on property taxes. Since the state has to make up the difference when schools lost money to TIF, the state ends up saving billions of dollars a year. As the debts are paid off, the state will save even more money.
