New Hollister YMCA, Gavilan classroom expansion in jeopardy
The Hollister Redevelopment Agency’s project list just got a
whole lot shorter after state officials announced that they will
take millions from local governments in an effort to shore up a
multi-billion-dollar budget gap.
New Hollister YMCA, Gavilan classroom expansion in jeopardy
The Hollister Redevelopment Agency’s project list just got a whole lot shorter after state officials announced that they will take millions from local governments in an effort to shore up a multi-billion-dollar budget gap.
The most noticeable impact of the shift of tax revenue from local to state coffers will be in planned local projects that could fall by the wayside, including the RDA’s offer to provide low- or no-interest loans for a new YMCA site and expansion of Gavilan College classrooms downtown.
“I want to say it’ll be in the neighborhood of just under $5 million, including this year’s and next year’s ERAF [Educational Revenue Augmentation Fund] shifts,” said William Avera, Hollister’s development services director. “It has a huge impact.”
In the early 1990s, the state modified its property tax allocation system to direct a larger share of property tax revenues to schools, reducing state funding of education, according to the California State Association of Counties (CSAC). The property taxes shifted to schools from cities, counties and special districts totals more than $5 billion each year, CSAC says.
The additional amount of money that the state plans to take from local entities by March of 2010 will not be repaid, according to Avera.
“There’s no repayment of the money,” he said. “They’re just taking it.”
Avera said the RDA has roughly the amount of money the state is expected to take in its reserves, “but it was earmarked for a lot of projects and programs. If we end up losing that money to the state, a lot of that stuff will end up going away.”
Threatened projects include redevelopment of the 400 block property at the southwest corner of Fourth and San Benito streets near the Briggs Building parking structure, the retrofitting of the former Pinnacle building for more Gavilan College classroom space on the northwest corner of that intersection, and planned improvements to the Rancho San Justo Sports Complex.
“As we come out of this tough economic time, it will be a lot clearer to us what we can and can’t do,” Avera said. In the meantime, “we’ll be running on our annual increment dollars [from property taxes] and that’ll cover the overhead of the RDA and debt service on existing bonds.”
Local taxpayers will not have to pay more taxes as a result of the state’s plan to take more tax dollars, “but what they will see, for better or for worse, is the RDA will not be doing $5 million worth of projects, whatever they may be.”
Avera said RDA projects already under way, such as the demolition of the former Leatherback property as well as the West Gateway streetscape project and Fire Station No. 1 refurbishment, will continue as planned, since funding for them has already been committed.
“After that, we’ll monitor our reserves as closely as we ever have,” he said.
Avera said he expects redevelopment agencies will likely sue the state as they did last year to say the ERAF shift of property taxes is unconstitutional, “but at some point [the state] will figure out a way to get the money.”
