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What’s Mine is Mine. What’s Mine is Still Mine.

May 24, 2012

Ah, so business strategy is government strategy when it comes to funding.  If you get it, spend it so you get it again.  If they take it away, try to spend it before they get it back.  Follow Reason Magazine.  The article concerns the elimination of Redevelopment Agencies in the state and the plan to return that money back to the state government for redistribution.

…The state tasked each municipality with a redevelopment agency to determine what their “enforceable obligations” were. Which contracts did the redevelopment agencies get themselves into that must be continued by their cities even after the agencies were dissolved?

As The Orange County Register discovered, cities are pretty much trying to claim everything under the sun as an enforceable obligation, and the state is challenging cities’ efforts to keep from having to stop spending money on certain projects. In Orange County alone, the state is challenging nearly $2 billion in claims of enforceable obligations. (Teri Sforza does an excellent job documenting all the challenges for The Register. Every metro paper in California should do this.)

Furthermore, the state is discovering that several redevelopment agencies appear to have rushed to enter into new agreements after the law dissolving the agencies passed and cities are trying to preserve them.

“But, but… that’s money I committed to spend already.  You can’t have it back, becuase I know I won’t get it next year if I don’t spend it!”  Yea, that’s budget strategy in a nutshell.

I don’t expect that this is going to be an easy fight.  I’ve seen managers in an office raise unholy noise over losing $10k.  What’s going to happen when the plan is to pull millions out of city coffers to redistribute… and it might not come back to the city to spend!  Somewhere, a state accountant is going to scratch his head and wonder why the number that comes back is half of what was expected when all is said and done.

There’s no decent solution for this, mainly because of human nature.  But it’s enjoyable to watch, if only from a distance.

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