Forum Post: California Supreme Court:State lawmakers can seize $1.7B from redevelopment agencies!

California:A Microcosm of the Macrocosm...

http://www.mercurynews.com/california-budget/ci_19639440 "The California Supreme Court on Thursday found that state lawmakers had a legal right to seize $1.7 billion in redevelopment money to help solve the state's budget woes, at the same time reaching a result that may put the state's nearly 400 local redevelopment agencies out of business forever."

"In the ruling written by Justice Kathryn Mickle Werdegar, the court concluded the Legislature had a right to dissolve redevelopment agencies and there is nothing contained in Proposition 22 to "impair that power." But the court did find Proposition 22 trumped the ability of the state to enact the second law forcing redevelopment agencies to turn over large portions of their funding in order to survive."

"Even the state, however, may come up short as a result of the ruling because the total elimination of the agencies may reduce the $1.7 billion figure available in the current budget year, as well as amounts going forward. A lawyer for the state warned the Supreme Court in November that striking down the second law, which would have allowed the agencies to keep operating, could cut off hundreds of millions of dollars to the state. That would increase California's budget deficit.

In fact, the California Redevelopment Association estimates the state will lose $600 million of the $1.7 billion this year alone because of the ruling's impact on shuttering agencies altogether. Steve Mayer, the association's lawyer, said the court decision conflicts with Legislature's intent to keep redevelopment alive through the second law, and it is up to state lawmakers to fix the problem now."