The California Supreme Court on Thursday gave Gov. Jerry Brown and state lawmakers the right to eliminate community redevelopment agencies in a crucial decision that impacts the state budget.
But the fate of the more than 400 redevelopment agencies remains unclear as cities — and even many lawmakers — vowed to seek a legislative compromise next year that would ensure the agencies’ survival.
The City of Madera’s Redevelopment Agency will be affected by whatever the compromise dictates, according to the agency’s executive director, Jim Taubert (see accompanying story).
The court affirmed the state’s authority to dissolve the agencies, calling it “a proper exercise of the legislative power vested in the Legislature by the state constitution.” Doing so means more of the property taxes generated within redevelopment zones will go toward schools, law enforcement and other local services, freeing up as much as $1.7 billion in the state general fund during the current fiscal year. The money in the past was used by the agencies to spend on future redevelopment projects.
Lawmakers and the mayors of several large cities said Thursday they were inclined to work out a compromise after the justices issued their split decision. While they affirmed the Legislature’s authority to dissolve redevelopment agencies, the justices in a unanimous decision invalidated companion legislation passed last summer that was intended to keep the agencies operating by forcing them to direct a certain amount of property tax revenue to schools and other services.
The majority said that law ran afoul of voter-approved Proposition 22, which prohibits the state from raiding local tax money.
“I intend to work closely with leaders in Sacramento and across California to develop a responsible path forward that invests in our schools, our safety and puts the 14 million unemployed Californians back to work,” Los Angeles Mayor Antonio Villaraigosa said in a statement. “This includes new legislation to provide economic tools to communities most in need.”
Redevelopment agencies were authorized by the Legislature shortly after World War II as a way to restore blighted neighborhoods and are largely controlled by cities and counties to promote construction projects. They have been credited with revitalizing blighted districts such as the Gaslamp Quarter in San Diego, downtown San Jose and Yerba Buena Gardens in San Francisco.
Critics, including Brown, say some have become little more than slush funds for private developers. They want property taxes generated by new developments to be diverted from the agencies to local services that now must be funded by the state. Redevelopment money in the past has been used to finance big box retailers, sports complexes and other projects that critics say run counter to the agencies’ original mission.
“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,” the governor said in a statement.
The ruling was highly anticipated because it was a key component of balancing this year’s state budget. The state is heading into the new year with a $13 billion deficit over the next 18 months, and a ruling against the state would have widened the shortfall.