Redevelopment group sues state for raids on local fund

Published Tuesday, Oct. 20, 2009

The California Redevelopment Association filed suit in Sacramento Superior Court today to block the state Finance Department from carrying out a $2.05 billion shift of tax increment funds from local redevelopment agencies over a two-year period.

California's adopted budget for 2009-10 seeks 1.7 billion in funds from the state's redevelopment agencies to help finance schools and calls for shifting another $350 million in the next fiscal year. The suit challenges the constitutionality of the budget language and cites state plans to use the money for non-redevelopment purposes.

The association prevailed in an earlier lawsuit challenging 2008-2009 budget language that would have shifted $350 million in tax increment funds to the state. The state had appealed that court decision but later dropped the effort and, instead, pursued a larger share of redevelopment money for subsequent budgets.

"We believe the second budget raid by lawmakers is just as unconstitutional as the first," said association Executive Director John Shirey in a prepared statement. He called the budget language "irresponsible policy-making."

"Though we fully expect to receive a favorable decision from the court a second time, local redevelopment agencies still must be prudent and set aside funding in case the court does not rule by the time the payment is due in May 2010," Shirey said. "What that means is that many agencies will, in effect, cease to operate because they will have no funds available for new investments in their communities."

Call The Bee's Loretta Kalb, (916) 321-1073.

More Information

Database: See how much your local government will lose under state budget
Local officials decry budget's transfer of redevelopment funds
State budget crunch undercuts local redevelopment plans


Popular Comment
Seems to me that nothing can ever get done unless the lawyers fight it out. This not what the founding fathers of America ever wanted. Another example of a good actor acting badly as a governor. He was a mistake. State is not broke.

-- collegebob