Thursday, August 11, 2011


tonylucy smf: Even as the projected state revenue falls short - legal challenges – and a game of ‘hide-the-ball’ by the City of Los Angeles – pulls even more money from public education in California and LA.   Apparently our “Education Mayor’ and his friends in City Hall – and the billionaire developers of the new football stadium and convention center expansion - are more enamored of the CRA and those projects than they are of educating children. It will be interesting how much the mayor+developer-supported Board of Education majority – and the board’s appointed superintendent - will say - and how loudly they say it - about this effort to further cut funding to schools. 

Los Angeles' redevelopment agency still alive after budget deal

The Los Angeles City Council passes an urgency ordinance that keeps its redevelopment agency intact by moving about $97 million in redevelopment funds to the county.

By David Zahniser, Los Angeles Times |

California Seizure of Redevelopment Funds Blocked by Court

By Karen Gullo and James Nash | Bloomberg BusinessWeek |

(Updates with court decision schedule in second paragraph.)

August 11, 2011 - A funny thing has happened to L.A.'s redevelopment agency in the wake of the state's yearly budget meltdown.

After months of serving as the ripest of targets for budget-cutting state officials, the Community Redevelopment Agency turns out not to be so dead after all.

That news became official Wednesday, when the City Council voted 13 to 0 in favor of an urgency ordinance that keeps its redevelopment agency alive and intact — by moving roughly $97 million in redevelopment funds to Los Angeles County.

Council member Bill Rosendahl

Council member Bill Rosendahl listens to a presentation at City Hall. (Gina Ferazzi / Los Angeles Times / July 29, 2011)

Had the CRA refused to send that sum, it would probably have been forced to go out of business, under the terms of a budget deal approved nearly two months ago between Gov. Jerry Brown and the Legislature. Brown had repeatedly called for the outright elimination of redevelopment agencies.

Under a compromise, redevelopment agencies across the state can stay put if they turn over $1.7 billion to other agencies this year and more money in future years. Even with those reductions, L.A.'s redevelopment agency will have $1 billion to spend between now and 2016 on a list of projects that was hurriedly compiled to keep the money out of state hands.

Backers of the agency applauded the move, saying redevelopment had made a positive mark on the city by attracting affordable housing and parkland to low-income neighborhoods. Critics have been less favorable, saying that development interests have used the agency as an ATM, getting money that would otherwise go to schools and counties.

Before approving the ordinance, council members railed at state officials for using the money to balance the budget. "I really resent it," said Councilman Bill Rosendahl. "What this governor and what this president has to do is bite the bullet on more taxes."

The first payment will arrive in January at the county, which will then distribute the money to school districts, fire districts and other local agencies. In future years, the agency will be required to send at least $25 million, city officials said.

Municipalities up and down the state are still hoping that the state Supreme Court will block implementation of those cuts and then take up a lawsuit filed by the California Redevelopment Assn., a group that represents nearly 400 agencies. That group contends that the redevelopment law violates Proposition 22, which sought to keep the state from raiding certain local governments.

"We are optimistic that we will prevail," said John Shirey, the group's executive director.

L.A. is not the only city seeking to preserve its redevelopment activities. In a survey commissioned by the California Redevelopment Assn. last month, the vast majority of agencies were determined to stick around, Shirey said.

"The indication was that 83% of the agencies were going to do anything and everything they could to try to come up with the money," he said.

August 11, 2011, 5:00 PM EDT - (Bloomberg) -- California’s planned seizure of $1.7 billion from state redevelopment agencies was temporarily blocked by the California Supreme Court, threatening to open a hole in the state’s budget.

The San Francisco-based court said today that two laws that divert the funds can’t be enforced except for provisions that preclude redevelopment agencies from incurring new debt, transferring assets and entering new contracts, according to an e-mailed statement from the court. A final decision on the laws will be made before Jan. 15, the court said in an order.

The cities of San Jose and Union City, the California Redevelopment Association and the League of California Cities sued California Controller John Chiang and the California Department of Finance July 18 to overturn the two laws. The cities and the associations allege the statutes violate a ballot initiative approved by voters last year that prevents the state from seizing revenue dedicated to local government.

Today’s ruling temporarily halts the move by Governor Jerry Brown to divert $1.7 billion from redevelopment agencies to balance California’s 2011-12 budget. The Brown administration had counted on the money to avoid deeper cuts to education.

California’s $86 billion spending plan took another hit earlier this week when Chiang said July revenues had fallen more than 10 percent short of projections.

“We’re glad the court took the case and we’re glad it issued the stay,” said Steve Mayer, an attorney for the plaintiffs.

Jacob Roper, a spokesman for Chiang, didn’t immediately return a voice-mail message seeking comment on the court’s order. H.D. Palmer, spokesman for the California Department of Finance, didn’t immediately return a voice-mail message seeking comment.

The high court today ordered the state to explain why the seizure of redevelopment funds shouldn’t be blocked.

California lawmakers approved a budget in June that kept alive 400 redevelopment agencies while requiring them to turn over $1.7 billion.

The case is California Redevelopment Association v. Matosantos, S194861, California Supreme Court (San Francisco).

--With reporting by Alison Vekshin in San Francisco. Editors: Peter Blumberg, Steve Farr

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