State supreme court to hear case put forth by San Jose and other
cities
The Hollister City Council on Monday put off any consideration
on a proposal to join the alternative state program for
redevelopment.
State supreme court to hear case put forth by San Jose and other cities
The Hollister City Council on Monday put off any consideration on a proposal to join the alternative state program for redevelopment.
Council members Monday weighed a resolution to “opt in” for the “alternative voluntary program” as a redevelopment agency. Hollister is among 425 municipalities in California maintaining RDAs that are threatened by state legislation that cuts them from the budget, but provides an alternate program requiring payments back to the state. The state hopes to save about $1.7 billion by largely eliminating RDAs.
For Hollister, opting in for the new program would involve paying close to $4 million in a one-time fee, and then about $950,000 annually after that. If the city does opt in, it could pay the $4 million fee by having the state withhold $2 million per year, for two years, in housing funds.
At Monday’s meeting, council members were told the state is giving jurisdictions until the end of the week to make a decision. They discussed reconsidering the matter at a special meeting later this week.
The California Supreme Court announced Aug. 11 it will hear a case challenging the legality of a pair of new laws that could kill the state’s 400 redevelopment agencies.
The court put on hold most provisions of the laws until it can fully review them. It has scheduled arguments for mid-October and is expected to decide the case by Jan. 15, when redevelopment agencies are required to make payments to the state if they want to stay alive.
As part of his budget, Brown signed into law two statutes, AB 1×26 and AB 1×27, which eliminated the agencies but allowed them to reopen if they collectively paid $1.7 billion to the state.
Critics had called the move to take money from the agencies “extortion” and said it flouted the state constitution by ignoring the will of voters, who last November approved Proposition 22, which prohibited state raids on local governments.
“The whole purpose of this scheme was to raid local redevelopment funds that Proposition 22 specifically said could not be taken that way,” said Chris McKenzie, the executive director for the League of California Cities. “We think it’s an extremely positive sign that the court is taking the issue very seriously. It’s a matter of statewide importance that needs to be resolved quickly.”
San Jose and a group of smaller cities joined with the California Redevelopment Association in the lawsuit against Ana Matosantos, director of the state’s Department of Finance.
H.D. Palmer, the department’s spokesman, said Thursday the governor believes he is on firm legal ground.
“Redevelopment agencies were created by an act of the Legislature and similarly they can be dissolved by an act of the Legislature,” Palmer said.
Redevelopment agencies receive funding from what is known as “tax-increment revenue.” The money comes from property tax increases that result from improvements and new development within a redevelopment zone.
The agencies will remain open, but won’t be able to incur new debt, purchase property or enter into new contracts while awaiting the court decision.
McClatchy wire contributed to this report.
