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City officials in Irwindale took the issue up CRA research found that the lost investment directly with the Governor last week, when he dollars would also mean an estimated 12,000 to came to their city as part c~ his statewide tour to 16,000 lost jobs, more than 50% of those in the urge support for Propositior,~ 57 (the $15 billion construction industry. deficit financing bond) and 5g (balanced budget requirement). The January 22 press event took San Jose Mayor Ron Gonzales focused on the place on the factory floor of the Miller Brewing job losses in comments published in the San Frah- Company. cisco Chronicle on January 13. Referring to the Governor's State of the State Speech "he said 'Jobs! According to a next-day Sacramento Bee Jobs! Jobs!' and I said 'Yes! Yes! Yes? That's abso- report, while expressing support for the lutely the way that we're trying to do it .... But you Governor's measures the Irwindale officials also can't say that on Tuesday and then on Friday politely pointed out that his proposed shift of RDA propose a budget that takes the heart out of (the) funds "would cost their city $600,000 in redevelop- redevelopment agency that we use to create jobs ment money" and that "the Miller brewery wouldn't producing affordable housing, that we use to create be in Irwindale without help from the redevelop- new industry centers like our biotech innovation ment agency, center". "Brewery officials said they employ 700 at the Other Ripple Effects Irwindale plant and paid $66.5 million in state and local taxes and fees in 2002." CRA research found that the impacts of the lost construction industry jobs would ripple throughout Mayor Mark Breceda "asked why a governor the California economy, affecting residents and the who calls himself the state's job czar would reduce amount of state taxes they pay. For example, the a program that produces jobs and tax revenues, annual state production of all goods and services would fall by an estimated $1.4 billion to $1.7 billion, "'it drives redevelopment and creates busi- more than half of that (57%) coming from the con- nesses and jobs,' he said." struction industry. Total statewide income to resi- dents would decline by $680 to $870 million. Irwindale's city manager Steve Blancade "said he was 'baffled' by the governor's plan to cut a State and local taxes would then decline - by an program that helped create 20,000 to 25,000 of estimated $56 to $72 million. the 45,000 jobs in Irwindale. $1,2 Billion Bonding Capacity Also Lost "'Redevelopment agencies are the engines that drive the economy,' he said. 'We are hoping The property tax shift would also impact an this plants a seed in the governor's mind to agency's ability to borrow money at Iow cost by rethink his proposed cuts.'" issuing tax-exempt bonds - an estimated $1.2 billion in lost bonds for project investments (a 1 to 9 ratio), CRA Studies Document Impacts according to an estimate prepared by E.J. De La Rosa and Co., a California-based investment bank- A survey of redevelopment agencies con- lng firm that acts as a financial advisor to the State ducted last year on behalf of the California Rede- Controller for short-term borrowings. velopment Association (CRA) found that every dollar of property tax invested in redevelopment activities leverages an additional six to seven Cities and Counties Ultimately On the Hook dollars of private investment that would not For cities, there is one final, serious consider- have been made bv the orivate sector on its ation: if a city or county RDA lacks the available own. This means that the $135 million proposed funds to meet its ERAF shift obligation under the shift to the state could mean a loss of $810 -$945 Governor's plan, city and county funds would be million in public and private investment in Califor- nia communities. Continued on Page 5 PAGE 4/PRIORITY FOCUS Visit the League's Official Web Site--www.cacities.org