Wastrel Cities Prove Brown's Plan Is Right

JAN. 21, 2011


California cities like to depict themselves as the victims of a bad economy and a profligate state government intent on taking away “their” tax dollars and diverting it to the bureaucracies in Sacramento. But while their complaints about economic times and wastrel state officials often are valid, the truth is that city governments often rival Sacramento politicians for their wastrel ways.

Note how cities are handling Gov. Jerry Brown’s proposal to eliminate the state’s 425 redevelopment agencies – by spending or tying up their tens of millions of dollars in redevelopment cash as quickly as possible. They are spending money as fast as they can and in an irresponsible way so the state can’t touch it – evidence in itself about why Brown’s plan makes so much sense.

City officials, during a League of Cities conference in Sacramento, denounced the Brown plan and claimed that the diversion of state dollars back to the state general fund (redevelopment agencies are state agencies, after all) is somehow unconstitutional. This, from the same cities that have wantonly violated property rights as they grab land on behalf of developers, is a bit hard to take. They rarely care about the constitutionality of their takings and stretch the definitions of public use to justify the use of eminent domain to enhance what they call economic development.

Currently, the city of Rialto is trying to subsidize an In-N-Out restaurant, yet another reminder of how redevelopment agencies squander tax dollars on special privileges for politically favored businesses and developers. How many of that chain restaurant’s competitors will get the same land discounts and the same fast track through the entitlement process? Is it fair for Joe’s Burger Joint to have to help subsidize his competitor?

If there’s demand for a burger joint, then the market can provide such a joint without a government subsidy. Let’s face it, if In-N-Out requires government efforts to sell its highly popular (and fattening) burgers, then the free market is a bust and the Eastern European central planners were right. Government is not supposed to pick winners and losers and is supposed to be there to provide those services the market can’t provide.

Central planning is what redevelopment is all about. Government officials get to decide what businesses go where. Consultants enrich themselves off of taxpayers. Small property owners are pushed aside on behalf of big chain stores favored by the political establishment. It’s a grotesque system. Unfortunately, Brown told the League of Cities that he likes redevelopment, but has to cut somewhere. So much for making the moral case for shutting down these wasteful and abusive agencies.

Brown’s budget plan explained that most of this redevelopment would take place without all the government involvement. Why did he lose his voice on this key issue? And Brown’s fellow Democrats in the Legislature have not introduced legislation to put a moratorium on redevelopment spending, which means that these cities can go on frittering away dollars in order to hide it from Brown’s reform effort. This is unethical and pitiful and evidence that Brown is no master politician, all the fawning media profiles aside.

Speaking of pitiful, California Republicans, with only a handful of exceptions, have been mum on Brown’s plan. As CalWatchdog reporter Katy Grimes explained after contacting various Republican legislative leaders, “nearly every Capitol Republican staff member that I’ve spoken with recently has been non-committal and provided carefully worded responses, instead of the support I expected for Brown’s proposed elimination of the agencies.”

In my coverage of local government, I found that Republicans are as supportive as Democrats about this anti-free-market government redevelopment mechanism. They like the power of blight removal, the ability to shower developers with favors and anything that claims to be pro-business, even though Republicans are supposed to be pro-market. Favor-seeking businesses are nothing to defend, but no one should be surprised that the party of George W. Bush, Arnold Schwarzenegger and John McCain isn’t really a party of limited government and free markets.

Yes, Brown outsmarted the cities with his proposal by getting around Prop. 22, which stops state raids of redevelopment agency cash. If he shuts down the agencies, then Prop. 22 is moot. That was a clever move. But now the city officials and redevelopment junkies, consultants and corporate welfare types have outsmarted Brown. He had nothing in the works to halt city efforts to tie up their redevelopment cash, and he apparently didn’t line up support on either side of the aisle for this significant reform. Is this the Schwarzenegger disaster all over again?

Anyone who thinks that anything will change in Sacramento is delusional. Redevelopment reform will fail, voters will reject Brown’s tax-extension measures and the state will continue in a fiscal emergency situation. Maybe state bankruptcy, now being contemplated by federal lawmakers, is the only answer. As the New York Times reported yesterday, “Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.”

There’s no use expecting California’s government to reform the way it spends money, just as it’s hard to imagine that the same cities squandering their millions on In-N-Out restaurants will suddenly become fiscally responsible. Then again, it’s foolish to expect state legislators to change their ways even in the face of a fiscal disaster. State and city officials can only do what they know to do. What more can we expect from them?

Related Articles

Politics driving CA pension investments

Oct. 5, 2012 By Joseph Perkins The California State Teachers’ Retirement System announced this week that it is sinking $42.8

Reform group wants higher taxes

March 24, 2010 By KATY GRIMES At a hearing Tuesday in the Improving the State Committee, the new “bipartisan” group,

CA Republicans to push immigration reform

Bucking their newly minted party leadership, several members of California’s congressional delegation have resolved to push ahead with a new