CRA Conference
Yesterday, I attended the California Redevelopment Association (CRA) Legal Issues conference in Sacramento. Normally, the conference focuses on the latest legal rulings and their impact on redevelopment activities (i.e. eminent domain, relocation, development agreements, CEQA, etc).
This year, legal rulings were out and the state budget was the subject of the day. As most of you know, redevelopment agencies had a great day in court earlier this year, blocking the theft of $350 million in revenue by the state of California. Unfortunately, we weren't able to bask in the glow of our victory very long. This year, the state worked with the Attorney General's office to craft what they hope is a litigation proof theft of our funds. They also changed the dollar amount. While they promise to only steal $350 million next year, they decided to take $1.7 billion in the current fiscal year. The City of Manteca's share of the theft amounts to $6.7 million.
Not only will this theft eliminate 164,000 family wage jobs over the next year, it will likely bankrupt a number of redevelopment agencies and force other agencies to completely suspend operations for several years. Luckily, here in Manteca we've got a healthy reserve of RDA funds, so we should be able to survive--but job generating infrastructure projects won't be able to constructed during these hard economic times.
This legislation that implemented this year's taking was deviously crafted to minimize its chances for being overruled in court. On the other hand, like most 11th hour legislation, it is full of confusing and contradicting language. In addition, CRA's legal team strongly believes it is every bit as illegal as the legislation crafted last time.
The legislation creates yet another confusing fund for the County apportion for distribution of property taxes. The money shifted from each redevelopment area is supposed to be paid directly to benefit students living in redevelopment areas or redevelopment-assisted housing. Anyone who actually reads the statue that supposedly implements this shift will tell you that it is completely incomprehensible. It is likely that every County will interpret the legislation differently and there will be lots of winners and losers depending on the County.
I won't bore you will all of the details, but CRA's legal team will be compiling "horror stories" from every redevelopment agency in the state to demonstrate the arbitrary and capricious method that has been devised in this transparent attempt to circumvent the law. Our redevelopment tax increment is protected by statute, and every attempt they make to take our funds should be rejected in court, no matter how they attempt to slice or dice the law.
CRA should be filing the lawsuit in the next month or so, and hopefully we'll have a ruling well in advance of May 10th, when we are required to make the payment. In the meantime, it will have a chilling effect on economic development in California, which will further impact state revenues. I'll use this blog to provide updates on the status of the litigation.
This year, legal rulings were out and the state budget was the subject of the day. As most of you know, redevelopment agencies had a great day in court earlier this year, blocking the theft of $350 million in revenue by the state of California. Unfortunately, we weren't able to bask in the glow of our victory very long. This year, the state worked with the Attorney General's office to craft what they hope is a litigation proof theft of our funds. They also changed the dollar amount. While they promise to only steal $350 million next year, they decided to take $1.7 billion in the current fiscal year. The City of Manteca's share of the theft amounts to $6.7 million.
Not only will this theft eliminate 164,000 family wage jobs over the next year, it will likely bankrupt a number of redevelopment agencies and force other agencies to completely suspend operations for several years. Luckily, here in Manteca we've got a healthy reserve of RDA funds, so we should be able to survive--but job generating infrastructure projects won't be able to constructed during these hard economic times.
This legislation that implemented this year's taking was deviously crafted to minimize its chances for being overruled in court. On the other hand, like most 11th hour legislation, it is full of confusing and contradicting language. In addition, CRA's legal team strongly believes it is every bit as illegal as the legislation crafted last time.
The legislation creates yet another confusing fund for the County apportion for distribution of property taxes. The money shifted from each redevelopment area is supposed to be paid directly to benefit students living in redevelopment areas or redevelopment-assisted housing. Anyone who actually reads the statue that supposedly implements this shift will tell you that it is completely incomprehensible. It is likely that every County will interpret the legislation differently and there will be lots of winners and losers depending on the County.
I won't bore you will all of the details, but CRA's legal team will be compiling "horror stories" from every redevelopment agency in the state to demonstrate the arbitrary and capricious method that has been devised in this transparent attempt to circumvent the law. Our redevelopment tax increment is protected by statute, and every attempt they make to take our funds should be rejected in court, no matter how they attempt to slice or dice the law.
CRA should be filing the lawsuit in the next month or so, and hopefully we'll have a ruling well in advance of May 10th, when we are required to make the payment. In the meantime, it will have a chilling effect on economic development in California, which will further impact state revenues. I'll use this blog to provide updates on the status of the litigation.
Labels: Redevelopment, State
posted by City Manager @ 7:15 AM
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