The California Supreme Court said it will hear arguments Nov. 10 in San Francisco in a case that will likely decide the future of redevelopment agencies in the state.
The California Redevelopment Association and the League of California Cities, along with San Jose and Union City, filed a lawsuit at the end of July to block two new laws passed as part of the budget that would force the RDAs to either send large payments to the state government or face the axe.
The court has said it hopes to come to a decision before Jan. 15.
Redevelopment in the state has been stalled, along with any related financing, while the lawsuit remains undecided.
In August, the high court issued a stay preventing the implementation of the new laws until a decision is made. But the justices did not issue a stay on a section of the new legislation that prevents the RDAs from taking on new debt.
California has around 400 redevelopment agencies that are facing new laws signed by Gov. Jerry Brown. That’s on top of this year’s budget, which forces RDAs to either pony up an estimated $2.1 billion over the next two years to schools and special districts or be eliminated.
The California Redevelopment Association estimates roughly 20% of RDAs will be stamped out if the new legislation is put in place, and the remainder will be much poorer.
In the 126-page suit, the plaintiffs pointed to Proposition 22, a ballot measure passed in 2010 that they said prohibits state politicians from taking or interfering with revenue dedicated to local governments.
California’s 399 active RDAs have $20.6 billion of tax-allocation bonds outstanding, while total indebtedness is $87.5 billion, according to the CRA.
