The Hollister Redevelopment Agency must relinquish $186,000 to a
state education fund to help alleviate California’s budget woes,
while the latest proposal this week from Sacramento calls for
additional
– and much more drastic – funding shifts away from local
agencies.
The Hollister Redevelopment Agency must relinquish $186,000 to a state education fund to help alleviate California’s budget woes, while the latest proposal this week from Sacramento calls for additional – and much more drastic – funding shifts away from local agencies.
In the past, the City of Hollister had been required to re-allocate state funding to the Education Revenue Augmentation Fund, but this is the first time the state has requested a funding shift from the city’s RDA as well, according to Finance Director Barbara Mulholland.
The city Finance Department could not calculate the ERAF shift required from the city by press time.
If last week’s proposal makes it through the legislature, RDA Director Bill Avera said the impact to Hollister may increase to about $500,000.
“It’s somewhat significant,” Avera said. “But it’s something we can deal with.”
Statewide, the California Department of Finance is requiring shifts from statewide RDAs to the ERAF totaling $75 million. The recently proposed legislation from lawmakers would increase the statewide amount to somewhere between $150 million and $250 million this year, Avera said.
The California Department of Finance calculates each agency’s shift amount using an “incredibly complex” formula, Mulholland said.
“I have yet to find a finance director who can actually explain how these numbers came to be,” she said.
The city’s Finance Department was informed of the funding shift in October after the RDA budget had been planned, Mulholland said. The City Council is expected to approve the transfer of funds tonight because installments are due by Saturday.
“This is one of those things, the state says it has the right to grab funds,” she said.
In 1992, the state began shifting property tax revenue into the ERAF, according to the California League of Cities. All ERAF funding is earmarked for K-12 schools and community colleges, which was designed to make up for a lack of funding to those institutions.
Gavilan College will receive $3 million in ERAF funding during the 2002-2003 fiscal year, while Cabrillo College will receive $530,000, according to the California Community Colleges Chancellor’s Office. Funding for specific school districts was not available.
“By law, the state is required to fund K-12 schools and community colleges,” Mulholland said. “In order to fund that, they’ve gone out to local agencies.”
The Hollister RDA was established in 1983 for the purpose of beautification throughout the city and to assist efforts regarding low and moderate-income housing. The RDA will fund such major future projects as the city’s Long-term Wastewater Management Plan and Highway 25 improvements.
In recent months, California government leaders, including Gov. Gray Davis, have considered shifting more than $500 million away from RDAs.
The Hollister RDA currently maintains about $17 million, according to Mulholland. Regardless, she did not take the recent RDA shift lightly.
“It’s more than a 1-percent hit, and $185,000 would ‘rehab’ a bunch of streets in the area,” she said.
