In a victory for California Governor Jerry Brown and in a blow to redevelopment agencies, the California Supreme Court ruled Thursday that the state acted legally when it eliminated more than 400 redevelopment agencies to meet budget constraints, but overstepped the law by allowing some of the agencies to remain in existence if they shared their property tax revenue.
The decision was detrimental for redevelopment agencies that have been developing and improving neighborhoods since 1945, but a victory for state officials struggling to balance the state budget. The ruling came in response to lawsuits filed by the redevelopment agencies to maintain their continuation and revenue streams, but signifies the worst possible conclusion for them. Supporters of the agencies say they have created jobs and thriving neighborhoods, but critics argue they have siphoned tax revenue from schools and other state programs and spent funding imprudently. California officials estimated that the resulting laws will produce $1.7 billion this fiscal year and an additional $400 million in coming years from agencies that decide to continue operations.
How important are redevelopment agencies in California? How wise is it for the State to abolish the funding for these organizations?
HD Palmer, deputy director of external affairs, California Department of Finance
Jim Kennedy, executive director of the California Redevelopment Association