SAN FRANCISCO — With less than a month left in the state's legislative session, the California Economic Summit sent a
The plan proposed by Gov. Jerry Brown in the state budget would change current infrastructure financing district Laws in order to give local governments tools to take on infrastructure challenges, following the dissolution of redevelopment agencies in 2012.
The Summit, a partnership between California Forward and the California Stewardship Network, believes that the new "Enhanced Infrastructure Financing Districts" would help provide infrastructure projects with a new array of funding streams.
"The Summit is encouraged by the state's efforts to support local leaders eager to address local infrastructure issues — and for providing California with a way to begin taking on one of its preeminent fiscal challenges," Summit leaders said in the letter, sent last week. "We encourage Legislative leaders and the Administration to continue this work not just by providing communities with the financing tools they need, but by also supporting efforts to capitalize a permanent funding source for affordable housing."
Brown first introduced the proposal, which included lowering the voter-approval threshold for forming a district to 55%, expanding IFD activities, and allowing IFD projects to overlap with former redevelopment project areas, in January.
Under current law, cities and counties can create IFDs to divert incremental property tax growth in a district for projects such as highways, transit, water and sewer systems, and solid waste facilities.
Incremental property tax growth can be used to back debt, similar to the financing of redevelopment, which was eliminated under 2011 legislation. Redevelopment financing did not require voter approval, but IFDs now require two-thirds voter approval for formation and also to issue debt.
Brown signed a bill in February that enacted one part of his proposal — allowing IFDs to be created in former redevelopment project areas.
In his May budget revision proposal, Brown changed the rest of his proposal to a new "Enhanced IFD Law" while leaving the existing IFD law as is.
His Enhanced IFD Law would maintain the 55% vote threshold, but clarify some additional uses for IFD law. The revision also includes the requirement for the Department of Finance to approve of the creation of an IFD, provided that all pending issues and litigation associated with a jurisdiction's redevelopment agency are resolved.
The Summit said the law would help local governments by allowing local leaders to support infrastructure projects through multiple funding streams, including existing public mechanisms, such as tax increment authority, benefit assessments, and fees, as well as private investment.
The group also released a
The Summit is urging legislative leaders to seek the enactment of the new law before the end of the 2014 legislative session.
