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Effects of and Reactions to Governor Browns Proposal to Eliminate Redevelopment Agencies

On January 11, 2011, Governor Jerry Brown released his proposed budget (the Proposed Budget) for the State of California (the State) for 2011. One particularly significant cut included in the Proposed Budget is the elimination of redevelopment agencies (RDAs). RDAs are state agencies that are intended to stimulate development in blighted areas by financing the development with revenue created from increased property tax revenues generated by the increase in property values following the redevelopment of a site (i.e., tax increment financing). The Proposed Budget would eliminate all RDAs throughout the State and, after paying off existing RDA debts, would redirect all property tax revenue funds that RDAs would otherwise have received to cities, counties, schools and special districts to be used for public services.

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