First, let me say happy New Year to you and yours and to thank you for having read The Madera Tribune, today and throughout the year. There are a couple of things I want to comment on — the attempt by Gov. Jerry Brown and the Democrats in the Legislature to kill the state’s redevelopment agencies, including Madera Redevelopment Agency, and the so-called Occupy movement.
It’s apparent that neither the governor nor the lawmakers understand much about redevelopment agencies and how they work. They just know that the redevelopment agencies handle tax money they’d like to get their own hands on.
The problem with that is most redevelopment agencies — Madera’s included — have millions of dollars in bonds to be paid off. The bondholders are, or should be, in first position. The RDA’s sell bonds to raise money for improvement projects, most of which create jobs in the construction industry. Those bonds have to be repaid from so-called tax-increment financing.
The tax increment is the difference between what the property taxes were on a property before RDA improvements and the usually higher taxes collected after the improvements are completed. Those incremental funds are earmarked to pay off bondholders. The rest of the tax money is distributed locally. If the state takes the incremental money along with what it already gets, and the bondholders are left holding the bag, Wall Street will become even warier of California’s credit than they are now.
The California Supreme Court this week upheld the right of the Legislature to close down the RDA’s, but it was silent about how the bondholders are to be paid back. This does not bode well for California.
As to the Occupy movement, it is an interesting phenomenon, but claiming to represent 99 percent of Americans is ludicrous. The Occupy members need to check their facts. They are actually the 1 percent — or less. The rest of us, rich, poor or in between, are too busy making our livings to go out and play with them in the parks or on the streets.