Stop, Drop and Roll

14 March 2007 | AUSD | John Knox White

There’s been a lot of talk about the effect of redevelopment on the current AUSD School Budget. While hints of this non-controversy started on Lauren Do’s site, I was approached by a city councilmember at the first Alamedans for Better Schools meeting in February who started hinting at his concerns about all the redevelopment money that could be going to the state and eventually back to Alameda.

So what is the actual issue?

It appears that Alameda Theater opponents are attempting to create an issue out of the school budget deficit. In 2005/06, the city collected about $11,800,000 in Tax Increment. Tax increment is property tax money collected in redevelopment areas. The “increment” is that money which is above the taxes collected the year the redevelopment area was created. (Meaning that the $10.8 million is on top of money that was collected, and continues to be collected, at the time of the creation of the Redevelopment Zone).

The myth being spread is that the school budget deficit is a mere $2million and the tax increment is $11.8 million, therefore there’s irrefutable proof that the redevelopment area (and by extension the movie theater and other developments) are sucking money away from our schools and creating a deficit.

The Fact is redevelopment is not killing the schools! I’m still collecting info on the West End Community Improvement Project, and so will only look at the BWIP (which includes Park Street and the Theater project) in this post.

In 2005/06, BWIP collected $4.5 million in Tax Increment. The schools would have, had there been no redevelopment area, collected $202,000. Instead, they collected $507,000. (it’s not a typo, they received 2.5 times the amount they would have received). The catch is that $362,000 of that money must be spent on affordable housing. $145,000 is going to schools as unsecured funds. That’s a 30% reductions, or about $57,000. Because of changes in redevelopment law, two of the other Redevelopment areas (APIP and Catellus) pass-through nearly 90% of the expected funding.

While we’re on the subject, someone ought to tell Action Alameda that they have there facts wrong! Their recent (March ‘07) newsletter says:

“The City will tell you that redevelopment agencies pass through funds to the school district. Fair enough, so how much of the $8.9 million raised was passed through to the school district? Only four hundred thousand dollars!“

They miss the point that had the redevelopment area not existed, the schools would have received…anyone?….anyone?….you guessed it, not quite $400 thousand dollars!

More info on redevelopment financing in future posts…