Is Prop. 22 Good or Bad for Imperial Beach?

The state took $2.7 million from Imperial Beach redevelopment funds in fiscal year 2009-10 and will take more than half a million dollars from the 2010-2011 budget.

As a result, a number of elected officials are speaking out, saying the state should not be filling gaps in its own budget by "robbing" the coffers of local municipalities.
"The state took, it didn't borrow, this money," said Imperial Beach City Manager Gary Brown. "And it took a bunch of projects we could have moved forward with and put them on hold."

Money taken by the state from last year's redevelopment funds was previously earmarked for improvements to the Senior Center and baseball and softball fields at IB Sports Park.

"It's a knotty problem," he said. "I'm not making light of their task, especially when they have to pass a budget with a two-thirds majority instead of a simple majority.  But they could be increasing their revenues in various ways or cutting back programs instead of taking monies from cities. It's not great science."

City Councilwoman Diane Rose feels that in taking this money, the Legislature is negatively impacting both local and state economies. That's why she supports Proposition 22, which would prohibit the state from taking money from local governments.

"Taking redevelopment dollars—which are the dollars spent on pure economic projects, creating not only construction jobs, but local jobs, and increasing sales tax and property tax—is suppressing economic recovery and future tax revenues not only locally but for the state as well," said Councilwoman Diane Rose.

"The cities feel that they are backed against the wall," she said. "The only recourse is to prevent future take-aways by the ballot initiative.  The state cannot keep using the cities as an ATM machine to balance the state budget."

State Sen. Denise Moreno Ducheney (D-San Diego), however, warns that Proposition 22 could be damaging.

"Taxpayers want everything but no one wants to pay," she said. "Proposition 22 will cause more problems on top of the ones we already have."

"The cities did not lose any money on this deal," Ducheney said. "There is a repayment schedule and it includes interest, and there is a stipulation that money cannot be borrowed again until it's repaid."

Ducheney also points out that the mandated redevelopment funds stayed locally.

"It never leaves the county of origin," she said. "The money was shifted away from redevelopment projects and is going to Imperial Beach schools."

Taking local redevelopment funds was just one part of the state's budget deal last year.

The plan also suspended California Prop 1A. Passed in 2004, the proposition was intended to protect revenues collected from local governments from being transferred to the state for statewide use. 

The suspension, which allowed for blanket borrowing of 8 percent in overall property tax revenue, meant Imperial Beach was also forced to write an additional $344,863 check payable to Sacramento.

Unlike the $2.7 million in redevelopment funds, which is gone forever, under the terms of the loan, borrowed property tax revenue must be repaid within three years with interest.

State Assemblyman Nathan Fletcher (R-San Diego) feels that borrowing money from municipalities needs to stop.

"The state needs to balance its budget and you don't do that by taking money from local governments," said Fletcher. "[The state Assembly] has consistently opposed any efforts to take money from local governments by Sacramento."