Cities challenge state budget measure cutting redevelopment districts

A spokesman for the state government said today that officials are confident a new lawsuit will not derail a state budget measure that will either eliminate or reshape local redevelopment agencies.

"We are confident the measure is legally sound," said state Finance Department spokesman H.D. Palmer.

The lawsuit was filed directly in the California Supreme Court on Monday by the League of California Cities, the California Redevelopment Association and the cities of San Jose and Union City.

It claims the measure enacted by the Legislature violates Proposition 22, a state constitutional amendment enacted by voters last year to protect local tax revenues from being seized by the state.

League of California Cities Executive Director Chris McKenzie said, "The governor and legislature have blatantly ignored the voters and violated the state Constitution. We must now go to the Supreme Court to uphold the voters' will."

The measure, part of an austerity plan to close a multibillion-dollar state budget deficit, would eliminate California's nearly 400 city and county redevelopment agencies by Oct. 1.

An agency could be reestablished only if it agrees to give up its share of $1.7 billion in property tax funding in the current fiscal year and $400 million in future years. The funds are additional tax revenues, or increments, attributed to redevelopment projects.

California Redevelopment Association Executive Director John Shirey called the required contributions "a ransom payment."

The lawsuit says the plan violates Proposition 22, which prohibits the state government from seizing or transferring revenues that are intended to pay for services provided by local governments.

The lawsuit asks the state high court to issue a stay suspending all or parts of the measure by Aug. 15.

Palmer said the state contends the Legislature has the power to eliminate redevelopment agencies because it created them.

"Redevelopment agencies were created by an act of the Legislature in 1945, and they can be dissolved by the Legislature," Palmer said.

The spokesman said the state maintains the measure does not violate Proposition 22 because it merely requires reconstituted agencies to pay contributions for school, fire and transit districts, but does not say those payments have to come from property tax increments.


Like this comment
Posted by HowAboutSomeRelevance
a resident of Blossom Valley
on Jul 19, 2011 at 8:59 pm

Come on Voice... how about providing some context or relevance to Mountain View?! What does this mean for the city and its two? redevelopment districts (Shoreline and Castro). Are there any implications (positive or negative) for the schools?

Like this comment
Posted by Finally some fat trimming
a resident of Monta Loma
on Jul 20, 2011 at 2:41 pm

About time some of the bottomless money pits are sealed up. Property tax money should only go to schools, not useless Agencies. Mr. Brown, this is a good start, keep up the good work.

Like this comment
Posted by @Finally
a resident of North Whisman
on Jul 20, 2011 at 5:56 pm

Only go to schools? So you don't need things like roads, police, fire, parks, etc?

Like this comment
Posted by Shoreline
a resident of Cuesta Park
on Jul 21, 2011 at 11:38 am

I've heard that the Shoreline "redevelopment" district is technically a bit different from others and may not be categorized similarly to other redevelopment districts. If the Voice does a follow-up, perhaps they could investigate that too.

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