Crony capitalism comeback fails to advance in Sacramento

SACRAMENTO – In politics, no battle ever is won. You can vanquish a venal politician in one election and – like a zombie in a horror flick – he’s back the next cycle. Likewise, lawmakers keep reprising bad ideas (rent control, single-payer healthcare, etc.) no matter their awfulness. “The price of freedom is eternal vigilance,” goes the saying often (and probably incorrectly) attributed to Thomas Jefferson.

One of the worst ideas I’ve reported on – and that’s saying something given that this is, after all, California – is redevelopment. On these pages today, we recount the history of that 1940s-era urban-renewal program. Designed to revive blighted cities, the agencies (RDAs) morphed in a central-planning tool that ran up debt, diverted tax dollars from traditional public services, showered subsidies on corporations and abused eminent domain on behalf of developers.

In particular, former Assemblyman Chris Norby of Fullerton, who played a key role in convincing former Gov. Jerry Brown to dissolve those agencies a dozen years ago, details the fiscal problems they caused. It hasn’t been that long since they’ve been gone, yet some lawmakers haven’t gotten the message. In the ensuing years, the Legislature reprised some aspects of it, by allowing cities to use a similar financing mechanism for a narrow range of projects.

This year, however, one bill tried to bring back redevelopment agencies in their entirety (albeit with some modest restrictions on eminent domain). When I first came to work for The Orange County Register in the 1990s, redevelopment was a very big deal. Its lobbyists had immense power in Sacramento and on city councils. I uncovered so many abuses – e.g., cities that seized small businesses and neighborhoods to make way for big-box stores – that I wrote a book about it.

Then in 2011, California faced massive budget deficits and Brown noticed that – because the state backfilled revenues the agencies diverted from public schools – redevelopment imposed a multibillion-dollar drain on the budget. Then poof, they were gone – and the courts affirmed the Legislature’s decision. They’ve been gone long enough that no one in the media seems to remember them.

This new redevelopment bill was moving through the Legislature, so this should have been front-page news. But my Google searches yielded nothing – no news stories or opinion pieces other than the ones that I personally had penned. One aspect of “eternal vigilance” is paying attention to the goings-on in the state Capitol. In fairness, a dozen years is an eternity in politics – and the state faces so many other challenges to our freedoms and wallets.

Fortunately, one of the state’s most-powerful lobbies, the California Teachers’ Association, was indeed paying attention. I’m a constant critic of this teachers’ union, which has done so much to turn California’s public schools from among the best in the nation to among the worst. Yet I was thrilled to hear that CTA helped kill the bill, even if it did so for obviously self-interested reasons.

“AB 1476 would divert local property taxes that currently go to schools to instead fund RDAs and would require the state to backfill schools to meet the Proposition 98 minimum guarantee,” the union wrote in a letter to the Assembly Appropriations Committee. And that was that. Other news events sealed the deal. You might have noticed, but California faces a $31.5-billion budget deficit, larger than the shortfall faced by Brown in 2011. The bill’s supporters had terrible timing.

And the ground has shifted in the debate over eminent domain. In the 1920s, the city of Manhattan Beach had seized a beachfront resort (Bruce’s Beach) from a Black couple for transparently racist motives. In 2021, Gov. Gavin Newsom signed a law returning the land to the couple’s heirs. The brouhaha over that effort reminded lawmakers that cities often abuse their takings power – and generally to the detriment of its least-powerful residents.

Today’s special section recounts the legacy of redevelopment agencies because, although the latest effort to revive them is dead, some legislative slow-learner will almost certainly try to bring them back in a future session. Redevelopment posed a threat to one of our most precious freedoms – our property rights – so let’s be more vigilant next time. Suffice it to say, but it’s not the safest bet to rely on a teachers’ union to protect us.