The California Legislature and Governor Jerry Brown would like cities, such as Santa Clarita, to pay for the continued existence of redevelopment agencies.

They say the payment is voluntary.

“It’s much like that voluntary payment we would make if a robber came and put a gun to us and said your money or your life, it’s no more voluntary than that is,” said Chris McKenzie, Exec. Director, League of California Cities.

Last Thursday the California Supreme Court heard oral arguments about the legality of the two redevelopment bills (AB 1X 26/27) included in the state budget. One eliminates redevelopment agencies; the other allows them to exist under a financial arrangement.

McKenzie says Governor Brown proposed eliminating redevelopment agencies so the state’s obligation to fund schools would be reduced. The legislature refused to do that and instead they wrote a different bill allowing them to get funds from redevelopment agencies.

“Some have called it a ransom, in exchange for staying alive. So they married the Governor’s idea with this idea of extracting funding from local redevelopment agencies,” McKenzie said.

The central claim in the lawsuit filed by the League of California Cities and California Redevelopment Association is that AB 26/27 violate Proposition 22, the constitutional amendment passed by California voters in November 2010 to keep the state from taking funds from cities.

“The biggest thing is that it’s probably illegal,” said Gail Ortiz, Communications Manager for the City of Santa Clarita. “It violates the idea of not balancing the budget on the back of cities.”

Santa Clarita is one of 462 municipalities represented by the League of California Cities.

Attorney Steven Mayer presented the oral arguments on behalf of the League and CRA.

“The primary attorney did a good job during the oral arguments. At this point, we look forward to a quick and favorable resolution from the Supreme Court,” said City Manager Ken Pulskamp.

The oral arguments were just one part of the litigation. Thousands of pages of briefs have been submitted by both parties to the judges.

“What they have to do now is take the additional information that they got from the oral arguments and have further discussions internally. Exchange opinions. So I don’t think anyone is predicting the outcome of the decision,” said McKenzie.

In McKenzie’s opinion two judges seemed to lean one direction, two the other way. A four person majority is required.

A ruling by the California Supreme Court is expected before January 15^th when the City of Santa Clarita would have to pay the $750,000 “ransom.”

To view the oral arguments before the California Supreme Court, click here.