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Only the Courts can Save CA Redevelopment Now . . .

June 16, 2011 By Bill Adams

Yesterday, June 15, 2011, the California Legislature passed a budget that diverts essentially all redevelopment agency funding to school districts.  The legislation, if signed by Gov. Brown as expected, disbands redevelopment agencies statewide but allows them to reconstitute conditioned on $1.7 billion  in property tax contributions to school districts in fiscal year 2011-2012 and $400 million/yr. thereafter.   It is expected that this requirement will financially gut most redevelopment agencies.  The legislation makes no distinction between successful and unsuccessful redevelopment agencies.  Successful redevelopment agencies often  increased revenues to school districts resulting from increased property tax values.  Redevelopment Agencies received funding from “tax increment,” i.e., the increase in property taxes presumably due to redevelopment efforts.  In addition to a share of the pre-redevelopment property taxes, school districts received a share of the post redevelopment tax increment.  The diversion of funds to school districts also  comes at the expense of redevelopment affordable housing funds, which also received a share of the tax increment.

The California League of Cities and the California Redevelopment Association are expected to challenge the legislation in court based on last year’s constitutional amendment prohibiting the State from raiding redevelopment agency funds to close budget shortfalls, as well as portions of 1978’s Prop. 13 and 2004’s Prop. 1A.  The legislation attempts to circumnavigate Prop. 22 by totally eliminating redevelopment agencies rather than simply diverting redevelopment funds.

See also:
Prop 22 Makes Redevelopment Abolishment Problematic, City Manager’s Blog, March 11, 2011

Redevelopment bill passes, threatens local funding, Roger Showley, San Diego Union Tribune, June 15, 2011

Filed Under: Planning, Revitalization Tagged With: California budget, Governor Brown, prop. 22, redevelopment, school district

avatar for Bill Adams

About Bill Adams

Bill Adams is the founder and chief editor of UrbDeZine. He is also a partner in the San Diego law firm of Norton, Moore, & Adams, LLP. He has been involved with land use and urban renewal for nearly 25 years, both as a professional and as a personal passion. He currently sits on the boards or committees of ,The Public Interest Advocacy Collaborative, San Diego Historic Streetcars, The Food and Beverage Association of San Diego County, and the Heal the Gash Committee (reconnecting communities divided by freeways).

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