San Diego lawmakers debate over the redevelopment battle

The battle to save redevelopment from the budget axe continued in San Diego Friday. In one corner, State Senator Christine Kehoe who supports killing the agencies and in the opposing corner Assemblyman Nathan Fletcher. KUSI's Steve Bosh was there and reports on the latest details.

Mayor Jerry Sanders is one of the big 10-Mayors who have joined forces to keep these agencies up and running. Redevelopment has transformed San Diego, and it's a vital part of the city's future.

Mayor Sanders led off the panel discussion saying the state has raided our redevelopment dollars before but this time it hurts in a different way, “by eliminating redevelopment they're not just raiding our bank account and making it harder to balance the next budget, they're raiding our investment portfolio,” said Mayor Sanders.

Much of the tax money generated by redevelopment stays with the agencies as an investment pool to generate new development.

The percentage of that money that would otherwise be going to schools has to be backfilled by the state.

How to spend redevelopment dollars is what the two sides are fighting about. The governor says much of that money is misused.

In San Diego, 1.5-billion dollars of redevelopment money has been invested downtown. But it's generated 13-billion dollars of private investment. Assemblyman Nathan Fletcher believes that keeping redevelopment money invested in the city of San Diego would be a better use of the money then “dumping it into the state's general fund.”

Nathan Fletcher says the 1.7-billion the governor gets from killing the agencies is a one time taking, and doesn't help the state's structural deficit in the out years. “It redirects the money back to schools on top of what they would get under Prop-98 as well,” said Fletcher.

Then there's Prop-22, the constitutional amendment voters approved last November which prevents the state from doing this but it also limits the governor's options.    

The governor felt he needed the 1.7-billion to cover the deficit so he decided to kill the agencies.

Fletcher says an alternative, compromise, ballot measure could be drafted to reform the agencies misusing their redevelopment dollars, “we could reform it and provide money to help the general fund, and get that done quickly, there's enough votes to do that, but the focus has been entirely on elimination,” said Fletcher.

This fight will be rejoined on Monday in the state legislature. Whatever the outcome, it will be minor compared to what's ahead. The big battle will be over extending the taxes, on sales, incomes, and vehicles.

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