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RDA'S: Why they do more harm than good

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Posted: Sunday, March 25, 2007 10:00 pm | Updated: 5:28 pm, Wed May 16, 2012.

Note to readers: This column is in response to our editorial earlier this month supporting the exploration of a redevelopment agency. It is written by Jane Lea, a former council candidate, activist and long-time Lodi resident.

Redevelopment Agency (RDA) funds are NOT free money. RDA comes with hidden costs; for example, $4.8 million was diverted from San Joaquin County services in 2003-04.

That means that our county courts, roads, parks, hospital, jail, Sheriff's Department, mosquito vector, Delta College, and many other county services that are used by the citizens that live in our community suffer. Our property taxes are not fully supporting the county services we need, use, and depend upon for education, health and safety.

Once an RDA project area is created, all property tax increments within the project area go directly to the agency. This means that all increases in property tax revenue are diverted to the RDA and away from the cities, counties and school districts that would normally receive them.

For example, the county mosquito vector district did not have sufficient funds to protect us from the threat of West Nile, malaria and other transmitted diseases. Property owners voted to assess themselves to give more money to the district.

An RDA takes property tax revenue away from education. Delta College does not get reimbursed by the State of California for lost property tax revenue. Instead, they have to limit classes and programs offered, cut services and raise tuition to make up the lost income.

Another hidden cost is that we pay a higher state income tax. Property tax revenues that were intended for education are taken away from our K-12 schools by an RDA. The State of California reimburses the loss of revenue back to the K-12 schools from the State General Fund. Tax payers are paying for the same education twice. RDAs are a state agency, and currently in California, RDA projects owe $61 billion dollars.

Over the life of the loan, interest on the $61 billion dollar debt payment will increase the debt by 2 to 3 times.

The San Joaquin County Sheriff's office doesn't have enough funding to combat the growing methamphetamine labs sprouting up all over our county. These illegal activities lead to higher crime rates, murders and drug abuse which affect all of us, especially our children.

With inflation and no increase in property tax revenue going to the Sheriff's Department, the problems will only get worse.

If the City of Lodi had an RDA, then local property tax allocations from the county that would have otherwise gone to the City of Lodi s General Fund for services such as, police, fire protection, parks and recreation, and public transportation, would be taken by the RDA for projects.

That means less money for health and safety in the city of Lodi. Ask yourself, how has the City of Lodi dealt with revenue shortfalls to its General Fund in the past?

1.) The Council threatens to slash police officers and firefighters jobs, and cut hours of operation for library, city hall, the finance department and eliminate recreational services.

2.) The city increases the Cost Allocation Program from the electrical department. The Cost Allocation Program is the cost the City of Lodi charges to the electrical department, for services it provides to the electrical department such as administrative services. Currently, this is approximately $3 million a year.

3.) In addition to the $3 million, the City of Lodi transfers an additional $10 million-plus to the General Fund from the electric department. These transfers would be increased to cover loss of revenue diverted to an RDA.

To pay for the additional transfer increases from the electrical department, the Lodi City Council would raise the electrical rates to residential customers to generate the extra money needed for the transfers to the city s General Fund.

Public money should serve the public. RDA does not provide a public service. An RDA can create bond debt without a vote of the citizens.

For example, if the county jail needs to expand, then San Joaquin County would have to take the bond measure to the voters for approval or disapproval.

But if an RDA wants to build a sports arena, they incur debt through bond sales without taxpayer or voter approval.

If the RDA defaults on the bonds, then the debt will be passed on to the city's General Fund.

Eminent domain through RDA provides no due process. A criminal is provided more legal rights than a property owner. A criminal is afforded an attorney, appeals process, and a jury to decide their fate.

An RDA can seize your property to benefit others. As a business or property owner, you lose your rights to voluntarily sell your home at an agreed price to a buyer.

As a property owner, you lose your right NOT to sell your home. An RDA has the power to take public funds and private property and give them to other private business or developers in the form of free land, tax rebates and cash grants that do not have to be repaid.

RDA takes away free enterprise by favoring big corporate retailers with subsidies. Small businesses have to face new competition funded by their own taxes.

For more information, please call Jane Lea at 329-6112.

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