For those who have been following the statebudget/redevelopment drama on this blog that unfolded after yesterday’sCalifornia Supreme Court ruling seemingly abolishing redevelopment agencies, belowis an update, courtesy of the California Planning and Development Report(excerpts). Our prior background postsare at:
Redevelopment Will BeBack -- But At What Price?
By Bill Fulton andJosh Stephens on 29 December 2011
The California SupremeCourt killed redevelopment this morning, but that doesn’t mean it’s dead. At first glance it would seem as thoughredevelopment agencies have no bargaining power at all. After all, it’s hard toimagine a weaker position than a state Supreme Court ruling saying you don’texist. But don’t forget the mostimportant point about the redevelopment battle: It’s not about redevelopment.It’s about money. And if all sides in Sacramento can resolve the money issue,the legal status of redevelopment will be practically irrelevant. There isevery reason to believe a deal will be struck. It's just not the deal that theCalifornia Redevelopment Association and League of Cities were hoping for whenthey filed suit four months ago…
In the meantime,however, California’s $6 billion redevelopment system has been thrown intouncertainly. Technically, at least, no redevelopment agencies exist and noredevelopment activities can move forward. Counties and school districts willpresumably move forward in creating the oversight committees required under thelaw to take over and dispose of redevelopment agency assets.
One thing is clear:Time is on the state’s side. For now redevelopment does not exist. The longerthe status quo persists, the more the state can claim the money – and the fartherdown the line counties and school districts will go in trying to lay claim toredevelopment agency assets. If the redevelopment establishment can’t strike aquick deal, we may be in for a long siege.
Within hours of theruling’s release on Thursday morning, both sides issued statements that couldbe considered conciliatory. Gov. Jerry Brown – who instigated the proposedelimination of redevelopment agencies in his budget last January – issued aone-sentence statement saying that the ruling “validates a key component of thestate budget and guarantees more than a billion dollars of ongoing funding forschools and public safety.”
Brown doesn’t crowabout the death of redevelopment. He doesn’t even mention redevelopment; nordoes he stake a claim to all $6 billion in redevelopment funds. He simply saysthe ruling means $1 billion more for schools and courts – making it easier for himto cash in last week’s promise that schools will get more money in this fiscalyear.
Meanwhile, the CRA andthe League – which have taken a slash-and-burn rhetorical approach since Day 1of this battle – also issued a statement containing calm-it-down language aimedat making a deal. CRA’s interim executive director, Jim Kennedy, said theorganization looked forward to finding “ways to restore redevelopment whilealso providing the state budgetary relief in a manner that doesn’t violate Prop22.” …
The League and the CRAimmediately tipped their hand as to what the likely negotiating points will be– and how they will build up enough political support to force a solution inthe Legislature. Many urban Democratic legislators are logical allies ofredevelopment and seemed uncomfortable in the party-line attack on it last year– just as Republicans seemed uncomfortable supporting it.
The CRA boardreportedly met via conference call this afternoon to discuss their strategy.CRA had already indicated that it would use at least two tactics to buildsupport: First, use the powerful affordable housing lobby as much as possible;and, second, resubmit their proposal from last year, which would permitvoluntary payments to school districts in exchange for extended life of projectareas.
It was not immediatelyclear on Thursday afternoon what Brown and legislature leaders will seek toextract as a price. But one thing is clear: Time is on the state’s side.
Full article at http://www.cp-dr.com/node/3081
Here is the official statement of the lobbying groupsmentioned above: http://protectourlocaleconomy.com/node/92
So what does all of this mean for UC and its budget. Nothing immediately. But note that the revenue that was at stakefrom redevelopment for the state comes to about 70% of what the state gives toUC. Had the state lost the case, UCmight have suffered in the next fiscal year. With negotiating strength now on the state’s side – as the excerpt aboveindicates – it is likely that the state will extract at least what it hadexpected from the redevelopment agencies when this year’s budget deal wasreached – and maybe more. On balance,from the UC perspective anything that enhances state revenue is a GoodThing. So the outcome is likely to be aGood Thing at least marginally.
Meanwhile, theposition of the redevelopment agencies can be seen below:
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