Regional News

California Court Denies Bid to Block $2B Transfer of RDA Funds to State

ALAMEDA, Calif. — A California appeals court has denied a bid by redevelopment advocates for a temporary stay to block implementation of a recent court ruling that allows the state to shift more than $2 billion from local redevelopment agencies to help balance the state budget.

The appeals court denied the advocates’ request late Friday, meaning redevelopment agencies were required to make $1.7 billion in payments to their respective county officials Monday. The remaining $350 million is due next year.

The fund shift from RDAs was included as part of the fiscal 2010 budget lawmakers adopted last year.

The money the agencies pay to their county governments will provide budget relief for the state by reducing the amount of support it is required to provide to local schools.

Funds from each redevelopment agency are directed to schools in their jurisdiction through a county Supplemental Educational Revenue Augmentation Fund, which reduces state support obligations for the schools on a dollar-for-dollar basis.

It’s a zero-sum game for the school districts, which end up with the same funding they would have otherwise.

The California Redevelopment Association sued on behalf of its members, in an effort to declare the fund shift to be illegal.

But the trial court judge, Lloyd ­Connelly, upheld the fund shifts in a ruling last Tuesday.

CRA executive director John Shirey said his organization will appeal in the next week or so.

“We strongly disagree with Judge Connelly’s ruling, which effectively says the Legislature has unlimited discretion to redirect local redevelopment funds to any purpose it wishes,” Shirey said in a statement. “Taking local redevelopment funds and using them to fund state obligations is unconstitutional.”

In the meantime, the association recommended that its member agencies make the required payments Monday.

Using a formula based on agencies’ 2006-2007 tax increment, payments range from $7,100 for the Yuba County Redevelopment Agency to $70.9 million for the Los Angeles Community Redevelopment Agency.

“The money being turned over to fund state obligations would have been used for local revitalization projects that would have improved our communities, created jobs, and stimulated our local economy,” Shirey said.



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