Appeal Filed Over Ruling for State to take Municipal Funds

The California Redevelopment Association will appeal a state court ruling that allows the state government to take $2 billion in redevelopment funds for use to reduce the budget deficit. The loss of the money means cities throughout the state will cancel or postpone redevelopment projects. In his ruling, Sacramento County Superior Court Judge Lloyd Connelly said it served a public interest that the state use the money for schools located within redevelopment agency boundaries. The first payment to the state is due May 10 but the CRA is seeking a stay while the appeal is being considered. A second payment by municipalities would be due in May 2011. In the San Fernando, Conejo, Santa Clarita and Antelope valleys, cities will lose in the range of less than $2 million to more than $17 million. What bristles city officials from all municipalities is that they have made tough decisions when it came to their own spending and now must face even further cuts to their general funds. The $6.3 million payment this month from the City of Simi Valley represents 60 percent of the Simi Valley Community Development Agency’s operating budget, said Brian Gabler, assistant city manager and economic development director. The city is still analyzing what it’s next step will be and hope the appellate court sees the situation different from the state court, Gabler said. “If the ruling stands it opens the door for the state to further raid city coffers and balance their budget on the backs of municipalities,” Gabler said. The state is projecting a $20 billion deficit for the fiscal year starting July 1. The CRA called the loss of the money an elaborate shell game with public funds. “This type of state budget gimmickry only deepens the public’s cynical view of state officials and destroys local efforts to create jobs and stimulate California’s weakened economy,” said Chris McKenzie, executive director of the League of California Cities, in a release.