Update on County Use of Redevelopment Funds - James T. Beall Jr. E-Newsletter (Jan. 2005)

Update on County Use of Redevelopment Funds

In October, I requested that County administration prepare a report on San Jose Redevelopment activities in response to questions raised at a neighborhood association meeting. Constituents wanted to know what happens to the funds the County receives from the San Jose Redevelopment Settlement Agreement. Below are some of the highlights from the report that the Board just received. Given school closings throughout the County and budget deficits for many school districts and the County. I think the facts speak for themselves.


State law allows Redevelopment Agencies to be created to eliminate "blight".

Since 1954 San Jose has never closed a Redevelopment project area.

San Jose administers more projects, and receives more money from those projects than any other RDA in the state.

Once redevelopment is created, property tax "growth" within the area is diverted from the general funds of cities, counties, schools and special districts; creating budget deficits.

Since 2001, the County has lost $212 million in property tax increment revenue to the City of San Jose Redevelopment Agency. Since 2001, the County has received $120 million in San Jose RDA Settlement agreement funding. These funds partially mitigate the lost property tax increment revenues normally due to the County government. The remaining $92 million in property tax revenues are lost to the County from San Jose RDA.The following cities in the County have Redevelopment Agencies: San Jose, Milpitas, Santa Clara, Mt. View, Morgan Hill, Campbell, Los Gatos, Sunnyvale, and Cupertino.K-12 Schools in Santa Clara County lost since FY 2001 over $99 million in property tax revenues due to redevelopment agencies. Community colleges lost over $20 million to redevelopment agencies.The County RDA Settlement funds have been used as follows, in compliance with tax and RDA laws:

Project

Franklin-McKinley Health Center on Tully Road: $19.6 million

Specialty Clinic at Valley Medical Center: $11.4 million

Purchase new County building on First Street to eliminate rental space: $25.5 million

Total: $56.5 million

The remaining $63.5 million of pass through funds has been used to offset general fund deficits.

Despite budget deficits, over the past three years the County has invested over $34.7 million in infrastructure projects in unincorporated county pockets including; pavement management, sidewalks, curbs and gutters, pedestrian improvements, drainage projects, street lights, intersection LOS, traffic operations, and bridge replacement and rehab.