State Supreme Court Upholds Abolition of Redevelopment Agencies
Governor and Norcal Democrat Jerry Brown and Assemblyman and OC Republican Chris Norby don't agree on much, but they do see graying eyebrow to graying eyebrow on abolishing local redevelopment agencies to help close the state budget gap. Today, they and other RDA opponents scored a victory when the California Supreme Court upheld outlawing the money-suckers.
But the Supremes went even further than that, also forbidding a compromise that would allow some of the state's 400 redevelopment agencies to continue operating so long as they shared their property tax revenue.
The California Legislature can "establish or dissolve local agencies and subdivisions as it sees fit," but once an agency is authorized, "it may not thereafter require that such allocated tax increment be remitted for the benefit of schools or other local agencies," reads the ruling written by Justice Kathryn Mickle Werdegar and endorsed by five other justices.
Chief Justice Tani Cantil-Sakauye, the lone dissenter, wrote in a separate opinion that she would have upheld the compromise.
Authorized since 1945, RDAs allow cities and counties to improve blighted neighborhoods through partnerships with developers that have the agencies acquiring property through lease, purchase or eminent domain and generally forfeiting future property tax revenue to cover initial project improvements like paving, lighting and utility installations.
Brea Mall, Downtown Santa Ana and Garden Grove's Harbor Corridor Entertainment District are among hundreds of Orange County projects that were partly developed by their respective city redevelopment agencies, which are lorded over by city council members acting in their dual roles as RDA directors.
But ending the agencies will generate $1.7 billion for California this fiscal year and $400 million annually in future years, reports the Los Angeles Times, citing estimates from state officials.
Supporters of RDAs counter they create jobs, improve cities and generate future sales tax and other revenues from land that would otherwise be a drain to society. Ironically, they are the ones who set the events in motion that led to today's ruling against RDAs. Backers filed the lawsuits to overturn the state law that banned RDAs or support the compromise measure.
That eventually led to the Supreme Court showdown that buoys Brown, Norby and other RDA foes who argue the agencies suck money out of public schools, reduce the state tax base and put taxpayer money at risk when projects don't pan out.
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