CA schools/safety gap funded, say goodbye to Pacifica Redevelopment

Why worry about the lost hope of redevelopment, this city threw away that advantage a long time ago.

From Mercury News/Howard Mintz, 12/29/11. "The California Supreme Court on Thursday found that state lawmakers had a legal right to seize $1.7 billion in redevelopment money to help solve the state's budget woes, at the same time reaching a result that may put the state's nearly 400 local redevelopment agencies out of business forever.  California's high court concluded the Legislature had the authority to raid redevelopment funding and dissolve the agencies earlier this year, rejecting arguments from redevelopment advocates that the budget gambit violated voter-approved Proposition 22, a 2010 measure designed to bar the state from seizing local funding to pay its bills.

The justices, however, struck down a separate state law approved as part of the legislative package that would have allowed redevelopment agencies to stay afloat if they agree to relinquish a large share of their funding to the state. Most redevelopment agencies had planned to take advantage of that safety net to remain in operation, but the ruling is likely to slam the door shut on their ability to fund local projects. In the ruling written by Justice Kathryn Mickle Werdegar, the court concluded the Legislature had a right to dissolve redevelopment agencies and there is nothing contained in Proposition 22 to "impair that power." But the court did find Proposition 22 trumped the ability of the state to enact the second law forcing redevelopment agencies to turn over large portions of their funding in order to survive.

"A condition that must be satisfied in order for any redevelopment agency to operate is not an option but a requirement," the court wrote. "Such absolute requirements Proposition 22 forbids." Chief Justice Tani Cantil-Sakauye dissented from that part of the ruling, saying the Legislature had a clear intent to keep redevelopment agencies in business, citing their ability to "successfully create jobs, encourage private investment, build local businesses, reduce crime and improve a community's public works and infrastructure."

For Gov. Jerry Brown and state lawmakers, the ruling allowing the redevelopment money grab is a crucial win because they otherwise would be scrambling to find ways to fill a $1.7 billion gap in funding for the current budget. The ruling comes in time for a Jan. 15 deadline, when half of the redevelopment money is slated to be turned over to the state for the 2011-12 fiscal year. "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," Brown said in a news release." 

Even the state, however, may come up short as a result of the ruling because the total elimination of the agencies may reduce the $1.7 billion figure available in the current budget year, as well as amounts going forward. A lawyer for the state warned the Supreme Court in November that striking down the second law, which would have allowed the agencies to keep operating, could cut off hundreds of millions of dollars to the state. That would increase California's budget deficit."  Read full article. 

Reference Proposition 22 (voted into law 11/2/10):   Voter's Guide, and Ballotpedia.

Posted by Kathy Meeh