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California Redevelopment Association Gears up to Sue to Keep Money from Schools

On June 29th, California Governor Jerry Brown signed into law bill ABx1 26, which eliminates the more than 400 redevelopment agencies in California, and ABx1 27, which creates an alternative redevelopment agency structure premised on local agencies contributing money to the State to help fund schools. The California Redevelopment Agency has announced that is readying a lawsuit to challenge these laws.

Section 1(b) of ABx1 27 notes that, “The diversion of over five billion dollars ($5,000,000,000) in property tax revenue to redevelopment agencies each year has made it increasingly difficult for the state to meet its funding obligations to the schools.”

The bill also provides for local municipalities to keep their redevelopment agency alive by making annual payments to the State to help fund schools. According to the California Redevelopment Association’s (CRA) website, that would amount to a total of $1.7 billion in payments to the State next year, from agencies across California.

The Association’s website also indicates, “CRA and the League of California Cities are readying the lawsuit challenging the constitutionality of the state’s recent actions. When we file the law suit, we will also submit a request for injunction, or stay, to enable agencies to continue operating while the case is being decided. These actions will be filed soon.”

In Alameda, the Community Improvement Commission of the City of Alameda is the local redevelopment agency created under prior California state law. In a spreadsheet on it’s website, the CRA estimates that based on $15.6 million in property tax revenue in Fiscal Year 2008-09, Alameda’s agency would have to pay $5.2 million to the State in the current fiscal year, 2011-12.

Earlier this year, Alameda voters narrowly passed an Alameda Unified School District parcel tax that doubled school parcel taxes for homeowners at the median home size, and runs for 7 years.

1 comment to California Redevelopment Association Gears up to Sue to Keep Money from Schools

  • Barb

    The bill would be better if newly created redevelopment agencies had to send the money directly to the school district instead of the state. As it is, Redevelopment funds are just additional profit to developers at taxpayer expense.

    Doesn’t our Council receive a stipend when they sit at meetings for the CIC?