As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Thursday, July 23, 2009

Redevelopment Securitization Scheme Threatens CA Budget Deal

Budget votes, originally scheduled in the Legislature for 2:00, have now been pushed back multiple times. The lastest word we have is 7:00 or 8:00, according to Karen Bass.

One major hurdle seems to be the securitization of redevelopment agency funds, which would net about $7.4 billion dollars over the life of the borrowing. Yesterday, Mark DeSaulnier described that provision to me as both "insane" and "illegal." Insane I expect, but illegal would mean that it could not be enacted tonight. And we are now hearing from several sources that the redevelopment legality is throwing a wrench into the budget package.

Remember, this is something that City of Industry lobbyists have been seeking for years, primarily so they can fund an outdoor stadium and attract an NFL franchise. The way that it's been structured, according to reports, is that this borrowing maneuver, which would tie up about 10% of total property tax revenue for up to 30 years, would replace the seizure of local government funds through Prop. 1A and HUTA (the gas tax). If the redevelopment securitization gets shot down, the borrowing would come from the above.

This was described to me last night by DeSaulnier as a shadow play, so Dennis Hollingsworth and his buddies can say they tried not to take from local governments. But it's completely unclear whether anyone would vote to take those funds through Prop. 1A and HUTA, which would blow enough of a hole to scuttle the deal.

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