Dan Walters

Dan Walters
Published: Tuesday, Jan. 3, 2012 – 12:00 am | Page 3A

California adopted redevelopment as a tool for improving its urban ambience just after World War II, and for more than 30 years, it was nothing more than an ancillary local government activity.

But when voters in 1978 adopted Proposition 13, the landmark limit on property taxes, redevelopment boomed because it let cities retain property taxes from their redevelopment projects, rather than share the revenues with counties, schools and special districts.

Within a few years, the number of local redevelopment agencies had doubled, and “project areas” had tripled. In 1988, voters enacted another measure, Proposition 98, to guarantee school financing, and that complicated matters further.

Proposition 98, among other things, requires the state to make up any shortfalls of property taxes to schools. And that has had the unintended consequence of forcing all state taxpayers to subsidize local redevelopment agencies’ off-the-top diversions of property taxes.

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