2014-15 BUDGET SUMMARY

According to the Governor, “the budget maintains the state’s fiscal stability by strengthening and investing in the state’s Rainy Day Fund and continuing to pay down the “Wall of Debt” – the most immediate liability constraining the ability of the state to emerge from its fiscal troubles.

“Specifically, the Budget makes a $1.6 billion payment into the state’s Rainy Day Fund – the Budget Stabilization Account – which marks the first deposit since 2007, and also directs $967 million to a Special Fund for Economic Uncertainties. And in lieu of Proposition 58 and ACA 4, the Budget proposes a constitutional amendment to bolster the state’s Rainy Day Fund.

“The Budget also continues to address the $25 billion Wall of Debt, directing more than $11 billion to pay off past budgetary borrowing. This debt, which totaled $34.7 billion in 2011, will be eliminated entirely by 2017-18 under this Budget.”

Here is a summary of the Governor’s budget, provided by the Assembly Democrat Caucus, with some items of interest to our industry:

Savings from Redevelopment Elimination

  • Includes General Fund savings resulting from the dissolution of Redevelopment Agencies (RDAs) to be $1.1 billion in 2013-14, $785 million in 2014-15, and estimates ongoing savings to be $1 billion annually.
  • Estimates that in 2013-14 and 2014-15 combined, cities will receive an additional $525 million, $605 million for counties, and $205 million for special districts in general purpose revenues from the dissolution of redevelopment. Additionally estimates ongoing property tax revenues of more than $700 million annually for cities, counties and special districts.

Tools for Local Economic Development

  • Expand the types of projects that Infrastructure Financing Districts (IFDs) may fund to include military base reuse, urban infill, transit priority projects, affordable housing, and necessary consumer services.
  • Allow cities or counties that meet specified benchmarks to create these new IFDs, to issue related debt, and to receive a 55 percent voter approval.
  • Allow new IFD project areas to overlap with the project areas of the former RDAs, while strictly limiting the available funding in those areas to dollars available after payment on all of the former RDA’s approved obligations.
  • Maintain the current IFD prohibition on the diversion of property tax revenues from K-14 schools and require entities that seek to establish an IFD to gain the approval of the county, city, and special districts that would contribute their revenue.
  • Specifies benchmarks for a city or county that formerly operated an RDA to meet before the expanded IFD tool is available including the conclusion of any outstanding legal issues between successor agencies and the state.

State-County Assessors’ Partnership Agreement Program

  • Establishes the a State-County Assessors’ Partnership Agreement Program on a three-year pilot basis for nine counties, to be funded at $7.5 million per year, and to be administered by the Department of Finance.

Click here to read the full budget.

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