RSG is one of the most active consultants working on a variety of area and project based tax increment financing districts in California. But despite the interest in EIFDs, CRIAs and other tools, many communities find these fall short of what is needed simply because their own share of the tax levy is so small – often less than 10 cents on the dollar. What gave rise to redevelopment agencies was the restriction on how cities could raise property tax rates after Proposition 13; cities found that redevelopment allowed more taxes to be retained and invested locally for projects to grow the economic base, provide the largest source of affordable housing assistance outside of tax credits, and fund all types of infrastructure. The newer tools are less helpful because they are limited to how much a local agency may be able to muster up from its own (often small) share of property taxes.
SB 711 proposes a focused change to this tool by allowing the State’s Strategic Growth Council to decrease what a city (or county) would have otherwise lost to the Educational Revenue Augmentation Fund to provide a larger share of the property taxes for certain TIF districts. Expanding EIFDs and CRIAs by creating a more useful revenue stream will help the state achieve GHG and VMT goals, while making local communities healthier, affordable and prosperous. ERAF took anywhere from 25% or more of a city or county’s share of the local taxes away – permanently. This could be a big deal if communities get behind this. Take a look at the sponsor’s SB 711 fact sheet. The California League of Cities are seeking support from local communities.