Southwest Redevelopment Area

The first two slides on the powerpoint you are about to view deal with the Southwest Redevelopment Area. This area was created five years after annexation. The rules are a little different in this area. Only in this area 20% of tax increment goes to schools, 20% to the county, and 20% to affordable housing. In all the other areas 60% goes to the Redevelopment Agency, 20% to affordable housing and 20% to schools. This is a special deal worked out between the city and the county as a condition of annexation.

        The first two slides are a summary of this document. When you view the Powerpoint you will see that in redevelopment areas the schools get only 20% or less of the property tax revenue. Prop 98 requires that they get 55%. To make up for this gap the state has instituted ERAF (educational revenue augmentation funds). Money is taken away from the property taxes that should go to cities, counties and local agencies and put into these funds to make sure that the schools get their 55%. The Southwest Redevelopment agency borrowed from these funds in 2004 and 2005.  Essentially these funds make up for the amount tax increment short changes the schools by pulling even more money from property taxes away from General Fund expenditures. This fact sheet explains this and attempts to fund police and fire with sales tax revenue.


This is the link to the Powerpoint Presentation.