News

State raids city fund for $1.67 million

Cities lose court fight over control of redevelopment funds

In the ongoing legal battle over the state's ability to raid municipal coffers to balance its budget, California cities took it on the chin.

A recent Supreme Court decision against redevelopment authorities required Mountain View to write a check to the state for $1.67 million.

"It is disappointing," said City Manager Kevin Duggan, who called it part of "a pattern of inappropriate fiscal maneuvering," by the state.

The California Redevelopment Association, representing redevelopment authorities like the one in downtown Mountain View, was denied a temporary stay by Sacramento Superior Court Judge Lloyd Connelly. The stay would have prevented the state from raiding $2.05 billion from redevelopment funds to balance the state budget.

Last year it was looking like the cities were winning the ongoing legal battle, Duggan said, but the state went to great efforts to learn from their court reversal last year.

The California League of Cities is working on a November ballot measure to prevent such raids by the state in the future. Several years ago, California voters passed a similar measure, Proposition 1A, by a wide margin, Duggan said, but it did not preclude the state from taking RDA funds.

Before the payment last week the city reported that the downtown tax district had $6 million in funds and was receiving about $4.7 million a year in property taxes, some of which would normally be diverted to schools. The funds are used for downtown improvements, such as parking garages and street trees. The City Council also hopes to subsidize a grocery store downtown if a recently commissioned study finds it to be economically feasible.

The state had justified the taking of the RDA funds by saying the money would be allocated to local schools, which local city officials called a "shell game."

"We don't expect them to bail us out and they shouldn't expect us to bail them out," Duggan said of the state.

Unless the redevelopment association eventually wins the court case, it appears that there will be a delay in additional funding for schools. About $800,000 per year for the Mountain View Whisman School District was supposed to come after the downtown tax district expired and debts were paid off by 2019. As a result of the decision, the city may be allowed to extend the tax district another year, officials said.

Comments

Posted by Spaghetti Freddie, a resident of Old Mountain View
on May 24, 2010 at 11:57 am

"a pattern of inappropriate fiscal maneuvering," said the pot to the kettle.

Where was city managements concern for the school district when they were approving the Minton's project?

Oh, that's right, they didn't have any concern, because they were the ones doing the raiding there. I guess it's really just a question of who's ox is getting gored.


Posted by Oy Vey, a resident of Old Mountain View
on May 24, 2010 at 2:07 pm

The City raided nothing when they approved the Minton's project. You have no idea what you're talking about.


Posted by stever, a resident of Old Mountain View
on May 24, 2010 at 2:25 pm

Everyone raids the tax payers' bank accounts. California = Greece i.e. a bankcrupt wellfare state for public workers.


Posted by Seer, a resident of Blossom Valley
on May 24, 2010 at 4:18 pm

Sorry Stever, the item on the state budget that just keeps growing and eclipses all but education is corrections. Not public worker pensions.


Posted by Lifetime Resident, a resident of Waverly Park
on May 24, 2010 at 4:43 pm

Unfortunately they all seem to have their hands in the cookie jar one way or another (just like the old time racoon trap, when the racoon would not let go of its prize; not even to save its life) once they've reached in and have hold of that rather large cookie inside, they're unwilling to let go of it and free themselves from the very narrow hole they so boldly reach into.

It's just that in this case the States' legal team is "better". Especially when the billable hours spent on the case is more likely to be paid in full if there is State, County, and City funds from which to draw payment against.

I'm sure even if MV had won, a big chunk of that "additional school funding" would have been used to pay the legal team who fought and won the battle for the cookie worth millions.

In the end only some crumbs will be left for those whose real need and noble cause was the rallying point in which all this exciting drama and shameless waste of time, money, and potential was set in motion


Posted by NeHi, a resident of Cuesta Park
on May 24, 2010 at 4:58 pm

At least there is a winner in this battle. Sadly, it is the lawyers.


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