Recipe for Revenge: Local Govt Political Leverage in the Battle over Redevelopment

The dust is far from settled on the redevelopment front as local officials make their legislative push to revive the agencies in the aftermath of the Supreme Court’s recent ruling. In addition, the City of Cerritos, along with nine other cities, filed a separate legal challenge in Sacramento Superior Court in order to raise constitutional claims that were not addressed in the court’s decision (a copy of the complaint can be seen here).

However, writer Joe Mathews over at NBC’s Prop Zero argues in an interesting article that the court’s ruling provides a recipe of revenge for local governments if they’re willing to consider another route in light of the governor’s staunch position on the matter and the inevitable budgetary tug-of-war that could decrease agencies’ slice of the pie every year if they are preserved in some other (i.e. weaker) form.

Mathews posits that local governments should use their political leverage in upcoming battles over pension reform and the governor’s desire to raise taxes by demanding greater power to raise their own revenues. An excerpt from Mathews’ article reads:

“The smarter move would be to launch a long-term campaign to return the power to set tax rates to local officials. Yes, that's a game-changer. And yes, that would change one provision of Prop 13. But the policy is right, and the strange politics of 2012 offer an opportunity. Gov. Jerry Brown and the Democrats are desperate to pass tax initiatives. But to do so, they'll need support from local elected officials -- for political cover and because the money from Brown's tax initiatives is supposed to go to local governments. By the same token, Republicans want pension reform and a new spending limit, and will have trouble getting them if local governments oppose the measure.”

“Locals should leverage Democrats' need for support for the tax initiatives -- and Republicans' desire for pension reform and spending changes -- to demand more flexibility to set tax rates themselves. The specifics of such a change would involve everything from tweaks of existing laws to the possibility of a future ballot measure or a constitutional revision process.  If Brown and Democrats balk, then the local governments should threaten to oppose -- loudly -- the tax initiatives, and to continue to use the courts to frustrate state budget-balancing efforts.”

Mathews concludes that without greater revenue-raising power, local governments will find themselves stuck in the same position, meaning the state will balance its budget on the backs of locals while offloading greater responsibility without the funds needed to cover the costs. Read the whole article here. Let us know what you think of Mathew’s arguments by leaving a comment below.