Cross-posted at PublicCEO.

California’s economy is broken. The day of reckoning for the great State of California has finally come. There is a perfect storm brewing in Sacramento that is sending budgetary tsunamis through every city in the state. After many years of financial smoke and mirrors, shifting costs and revenues from one side to another in a monstrous shell game, California faces a $25-billion deficit that cannot be explained, delayed or smiled away.

Recently I, along with members of our City Council and staff, had the opportunity to sit down with our Governor to discuss how this crisis will affect our City – specifically, how the Governor’s proposal to do away with the financial tool of redevelopment will wound our economic recovery efforts. It was not an entirely new discussion, as previous State takeaways from Atascadero’s redevelopment funds have cost us more than a million dollars. This time, however, we weren’t talking about a program where the State would "borrow" our funds. Governor Brown is talking about the end of redevelopment itself within the State of California.

Redevelopment law was developed to provide local agencies the ability to mitigate social and financial blight. It is a tool that promotes new economic growth by providing extended opportunities for public-private partnerships, paid for by a small slice of our local property taxes. In the City of Atascadero, redevelopment over the last eight years has provided the means for badly needed transportation infrastructure, as well as a Main Street program to lead downtown revitalization and business incentive programs. By law, 20-percent of redevelopment funding each year must go towards developing low-income affordable housing.

There is no question the projects and programs funded by redevelopment in the City of Atascadero have been successful. There is also no question that, without redevelopment, they would never have existed. Furthermore, with proposed dissolution of redevelopment, these beneficial projects and programs will cease to exist in the future.

Under the Governor’s proposal, redevelopment and its benefits would just go away. There would be no new projects and programs funded by redevelopment. Economic development in cities utilizing redevelopment would slow, as would property value appreciation, new job growth and low-income housing development. It is possible that, without redevelopment, there would be a one-time "windfall" for the State budget. This would not come close to closing the publicized budget gap, which is considered by many to be a wildly optimistic estimate. As redevelopment funds filtered back to other agencies such as schools, however, it is highly unlikely the State would maintain current levels of funding for these agencies, meaning they would be no better off than they are at present.

What then?

Without the redevelopment engine, economic development in blighted cities will grind to a halt, stalling job creation and revenue growth. Where, in the past, the State has been content to steal the golden eggs; it now seeks to kill the goose that lays them.

Governor Brown has taken office with battle cry of budget reform and economic salvation, no matter how painful. This is a message that resonates with many after several years of lip service to these issues. We reminded the Governor that the cities of California have already balanced their budgets, in spite of devastating raids by the State upon their treasuries. We continue to live through the painful process of bringing expenditures in line with our income.

Therefore, I respect the Governor’s dedication and willingness to make very difficult decisions for the benefit of California’s economic future. We must do away with costly State requirements that cripple our cities. We must face squarely the matter of underfunded state personnel benefits that have become an increasingly heavy weight to drag into the hyper-competitive world of the 21st Century. We must do away with the over-regulation of business that has driven so many firms to other states.

We need to fix what is broken, but we also need to keep what is working.

Redevelopment works. Redevelopment is a long-range solution for a long-term problem, not another "Band-Aid fix" to get us through another year.

Twenty minutes with the Governor was not long enough to cover all of the ramifications of his proposal in detail. Based on the Governor’s public comments pertaining to redevelopment, it is my impression that he feels much of the work done under the banner of redevelopment has been productive. In fact, as the Governor stated on January 10, "redevelopment does good work." That is certainly the case in the City of Atascadero and hundreds of other California municipalities that have used this most valuable economic tool to mitigate blight, increase local property values, create thousands of new jobs, partner with local school districts and provide low-income affordable housing.

For too many years the State of California has ignored economic reality. The cost of that denial is now all too apparent. The remedy for this fiscal crisis must be built upon a clear vision, clear understanding, and clear action. The clear result of abolishing redevelopment is a small one-time benefit followed by decades of inability by local governments to effectively combat economic and social blight. This is not a good strategy.

My Council colleagues and I greatly appreciate the fact that Governor Brown took so much time out of his busy schedule to speak with us. There is no doubt he is a man with a mission, great intelligence and charisma. I want to help the Governor fix California’s economy. Unfortunately, if the Governor takes away redevelopment, he is taking away our best tool for the job.