Californians bid farewell not only to 2011 this week, but also to the state's redevelopment agencies (RDA). The California Supreme Court upheld a bill that shut down the nearly 400 RDAs scattered around the state in a ruling issued on Dec. 29.
Redevelopment agencies were formed to fight blight, but Gov. Jerry Brown pushed for their elimination, arguing that diverting $5 billion in property tax revenue to RDAs left the state short on money needed for schools. In Mountain View, the city's RDA is largely credited with revitalizing downtown.
According to the court, since the legislature had the authority to create redevelopment agencies, it also had the power to dissolve them.
"Today's ruling by the California Supreme Court validates a key component of the state budget and guarantees more than a billion dollars of ongoing funding for schools and public safety," Gov. Brown said in a statement released Thursday.
However, the court ruling wasn't a total victory for the governor. The agencies were eliminated by AB-26, but another bill, AB-27 dubbed "extinction or extortion" by staff -- let agencies stay open by making hefty annual payments to the state. The League of California Cities and the California Redevelopment Association filed a lawsuit challenging the constitutionality of both bills.
The California Supreme Court ruling declared AB-27 unconstitutional based on the passage of Proposition 22 in November 2010, which made it illegal for the state to take money from local funds such as redevelopment revenue.
Losing its downtown RDA will cost Mountain View about $5 million in redevelopment funds, according to city officials. Paying what city officials dubbed a "ransom" to keep the agency open would have been expensive -- estimated at $2 million.
The downtown revitalization district was created in 1969 to help revitalize what was then a nearly vacant downtown. One of the oldest such districts in the state, it had been set to expire in April 2011, but City Council members approved a two-year extension in January in order to spend the authority's $5.5 million balance and "wind down in an orderly fashion," said then-City Manager Kevin Duggan.
Daniel DeBolt contributed to this story