San Francisco's Hit from State's Siphoning of Redevelopment Funds: $28.7 Million

Sorry Bob -- no money for you.

​Gov Arnold Schwarzenegger has taken to brandishing unsubtly lethal cutting implements of late. But when it comes to the sharpest cut of all, the pen really is mightier than the sword. Today the governor is wielding his "blue pen," administering an additional billion dollars or so to the state's stinkeroo budget via line-item veto.

So, expect City Hall-area bars to be doing a brisk business tomorrow when San Francisco government employees begin to get solid ideas how much of the money the state's large print giveth and the state's small print taketh away. One local agency head already knows how much is coming out of his budget -- Redevelopment Agency Executive Director Fred Blackwell.

Blackwell hasn't yet returned our calls, but John Shirey, the state executive director for the California Redevelopment Association, told SF Weekly that the state will essentially appropriate $28.7 million from the San Francisco Redevelopment Agency. "It's money that, for the most part, won't get spent," said Shirey. "So the losses are huge for the state on the whole. We estimate the $1.7 billion [being shifted away from local redevelopment agencies statewide] represents 164,000 jobs."

The redevelopment funds aren't directly being taken by the state but "shifted" to Educational Revenue Augmentation Funds. While the idea of shunting redevelopment money to schools sounds like a winner to many people around the state, Shirey described this move as a cynical smoke screen. Money taken from redevelopment and then placed in ERAF funds doesn't augment school funds -- as that amount of dough is then cut from the schools.

State Sen. Leland Yee voted against the shifting of redevelopment funds (he lost on this one). While local redevelopment agencies will be allowed to to extend the life of redevelopment areas and sell more bonds to make up for the money sucked up by the state governemnt, Yee notes that this is not a great way to make money in the present economy: "You are not going to get the best rate," he says. "You will be able to sell [the bonds] but it's pretty expensive money." What's more, the local governments "need that money now -- that's the problem with this."

In other words, Wimpy's refrain of "I will gladly pay you Tuesday for a hamburger today" doesn't appeal to those who are broke and hungry right now. Not surprisingly, Shirey said his organization plans to sue the state -- as they successfully did last year.

"We hope to win again so monies will not be lost for local redevelopment efforts," said Shirey. "But agencies are going to probably have to suspend or curtail a lot of activities to make sure moeny is available in case it does have to be paid."