Shaking the Piggy Bank — Monitoring SoCal’s Cash-Rich Special Districts
By Dave Sorem, P.E.
ECA Government Affairs Chairman and Southern California Partnership for Jobs Chairman
A recent article in the Orange County Register took issue California’s obscure but cash-heavy “Special Districts” asking the question “who is watching the billions of taxpayer dollars that fall into their really big piggy banks every year?”
While not a new question, it is one of the ultimate importance for the Engineering Contractors’ Association Government Affairs Committee’s emphasis on working with “local” agencies and governments.
It is also, oddly enough, a likely big-time political issue in Sacramento and big city halls around the state. Why? If these power centers see a pile of cash laying around they try to grab it. The dissolution of Redevelopment agencies under Governor Brown is the most recent example of this practice.
Measure of Success
Authorized by law since 1945, the agencies were responsible for such success stories as Old Pasadena and San Diego’s Gaslamp Quarter, but success often makes you a target in California. The redevelopment groups were dissolved by legislation passed and signed in summer 2011, which, backed by a unanimous ruling handed down in record time that same year by the California Supreme Court, threw 400+ redevelopment agencies out of business. The money that was going to the redevelopment agencies benefited sagging state budget coffers, still in the doldrums from the Crash of 2008, but taking it away hobbled local economic development and housing programs.
The redevelopment agencies controlled a meager $5 billion a year in tax revenue—chump changed compared to the $100s of billions handled by special districts.
That’s where the rub is. The OC Register piece quotes anonymous “good-government advocates” who claim the special districts a “have abused the public trust by hoarding vast sums of money.” The paper’s position on the issue is pretty clear from the headline: Billions pile up in special district accounts while critics say many should dissolve.”
ECA does not share in that view. We like working with local agencies and special districts (people we know) as opposed to faceless state and big city bureaucrats who would inherit the money, which mostly goes to water, sewer and transportation infrastructure.
To that end, we are partnering with the Southern California Partnership for Jobs to measure the existing state of special districts in our 12-county area, from a standpoint of current reserve funding with a view to getting more of that money scheduled for public improvements now, before the state starts shaking their piggy banks.
We will be ever vigilant on this issue and keep you informed if and when things change significantly.