October 16, 2012
Last year Governor Brown signed legislation to do away with Redevelopment Agencies as part of balancing the state budget. This year the Legislature passed bills to make it easier to create Infrastructure Financing Districts and expand their allowable projects. Those bills have now been vetoed by Governor Brown. Diversion of property taxes from school districts was not a part of any of the bills this year since the main reason to eliminate RDAs in the first place was to end the state’s payment to school districts of lost property tax revenue.
Of the vetoed bills, one, SB 1156 (Steinberg), created new entities called Sustainable Communities Investment Authorities where cities and counties could opt-out of their property tax contributions based on the specific project. Another bill, SB 214 (Wolk) would have removed the voter approval requirement contained in existing law to create an infrastructure financing district and issue bonds. SB 214 would also have expanded the types of facilities eligible for financing. A third measure, AB 2144 (Perez) would also have expanded the types of projects eligible for financing under the infrastructure financing district law but would have kept the voter approval, although reducing it from two-thirds to 55 percent. Finally, AB 2551 (Hueso) would have removed voter approval for certain renewable energy projects within infrastructure financing districts. The Governor’s veto messages make it clear he wants cities to focus on winding down redevelopment.