Judges’ opinion says state cannot require cities to make
payments to maintain redevelopment, the option Hollister chose to
keep it’s projects moving forward
Judges’ opinion says state cannot require cities to make payments to maintain redevelopment, the option Hollister chose to keep its projects moving forward
The California State Supreme Court today released the much-anticipated ruling on two state assembly bills that affect the future of redevelopment agencies. The judges were asked by the California Redevelopment Association – a group of cities and counties that banded together for the lawsuit – whether the state legislature can abolish redevelopment agencies and if cities have a right not to make payments to the state as a condition of continued operation.
The panel of judges ruled that the legislature does have the power to abolish RDAs, but that it is not legal for the state to levy a payment as a condition of continued operation.
“Answering the first question ‘no’ and the second ‘yes,’ we largely uphold Assembly Bill 1X 26 and invalidate Assembly Bill 1X 27,” the opinion read.
Hollister is one of many jurisdictions across the state that has been waiting for the outcome of the lawsuit since the city council opted to keep its RDA intact and to make payments to the state. RDA projects have included a façade improvement program, the construction of a downtown firehouse, which is currently under way, and a seismic study that proved the former Fremont School site would be a safe place for a courthouse.
The idea to abolish RDAs came up in last year’s budget wrangling as Gov. Jerry Brown tried to find a way to keep from making deeper cuts to schools. Much of the 83-page opinion reviews the ways in which public schools have been funded since 1910. The state faces a $12 million shortfall for the coming fiscal year.
Shortly after the opinion was released, Assemblyman Luis Alejo sent out a press release admonishing the ruling.
“I am extremely disappointed in the State Supreme Court’s ruling that abolishes Redevelopment Agencies,” he said in a press release. “Back in June, I voted no on both ABX1 26 and 27 because Redevelopment Agencies are far too important to local economies to be used like the state’s piggy bank. Now more than ever we need to preserve the tools we have left, like Enterprise Zones, to promote job creation and economic development throughout California. I look forward to working with my colleagues this year to restore business’ trust, renew efforts to spur economic growth, and regain lost ground with this setback.”
The opinion of the judges notes that Proposition 22, which allowed cities to create the redevelopment agencies, amended the state Constitution to impose limits on the legislature’s fiscal powers, “it neither explicitly nor implicitly rescinded the Legislature’s power to dissolve redevelopment agencies.”
The wording of Prop. 22, however, “expressly forbids the legislature from requiring such payments” as AB 1X 27 requires as a condition to maintain an RDA.
Betty T. Yee, First District Member of the Board of Equalization, said she was disappointed by the California Supreme Court’s decision upholding the state’s ability to eliminate Redevelopment Agencies (RDAs), while invalidating legislation that would have allowed RDAs to continue to exist if cities and counties made payments to special districts and schools.
“Unfortunately, this decision could eliminate a powerful tool for creating local jobs,” Yee said, in a press release. “Redevelopment has been successful at stimulating economic growth, revitalizing neighborhoods, and generating tax revenues. Despite isolated abuses, redevelopment, the largest economic development program in California, has proven more effective in creating local jobs and encouraging businesses to invest in local communities than tax breaks or other tools.”
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