New State Budget Proposal Calls for Elimination of Redevelopment; Potential Future Cuts to Education

San Leandro's redevelopment agency — responsible for projects such as the Creekside Plaza Office Complex, the Senior Center and, in part, the new ninth grade campus — would be axed under a budget deal struck between Gov. Jerry Brown and Democratic lawmakers.

Plus, school children could get a week less of instruction next year, if revenues assumed under the proposal don't materialize. 

The Democrats plan to surge ahead with the budget deal with or without Republican support, according to the Los Angeles Times and other media sources. The move comes just weeks after the governor vetoed a budget passed by the state legislature — the first budget veto in California history, the Times notes.

Unlike previous versions, the new budget does not depend on an extension of existing taxes set to expire July 1. As a result, the state tax rate will drop by a penny on Friday, bringing San Leandro’s tax rate down to 9.00 percent. Instead of tax extensions, the proposed budget assumes an additional $4 billion in revenue, according to the Sacramento Bee.

Should additional revenue fail to materialize, the plan would slash $2.6 billion (roughly equivalent to the entire ) mid-year, with deep cuts to schools and public safety. 

Like its earlier versions, this budget proposal would eliminate redevelopment agencies across the state, making the agencies null as of July 1 and redirecting their revenue to local government. Property owned by the agencies would be sold.

The move is expected to divert $1.7 billion from redevelopment to schools and local governments, schools and counties, according to a report by the Legislative Analyst's Office. The San Leandro Redevelopment Agency has already  to the City of San Leandro as a precautionary measure.

Lawsuits are likely to tie up the redevelopment matter in court. The League of California Cities and the California Redevelopment Agency have been prepared for this scenario for months and are ready with a lawsuit, community development director Luke Sims told San Leandro city council members at a recent meeting. 

San Leandro Mayor Stephen Cassidy said in an email that the elimination of redevelopment would "take away millions in local tax dollars from cities.

"San Leandrans want to decide how these funds should be spent, such as on projects like the wonderful new senior community center, rather than have Sacramento spend our property tax dollars as it sees fit," he said.

In a statement issued on June 17, Cassidy said planned local redevelopment projects could "generate 750 construction jobs, 700 permanent jobs, $1.3 million in annual property tax, and $2.1 million in annual sales tax, while leveraging over $150 million in private investment." 

Plus, Cassidy said, the loss of redevelopment would hurt the city's affordable housing efforts, which are funded through redevelopment, and limit the city's ability to reduce greenhouse gas emissions through transit-oriented development projects. 

Lawmakers were expected to vote on the budget Tuesday afternoon.