The League of California Cities filed a petition with the California Supreme Court to protect nearly $1 million dollars in redevelopment money for the City of Santa Clarita.
At 900 acres, the Old Town Newhall redevelopment area is one of the smallest in the state, however, the city is grateful for the assistance.
“That the League acted so quickly is gratifying,” said City Communications Manager Gail Ortiz.
In June, Governor Jerry Brown signed the state budget which included two redevelopment bills AB 1X 26 and AB 1x 27.
The central claim in the lawsuit is that AB 1X 26/27 violates Proposition 22, the constitutional amendment passed by California voters in November 2010. Proposition 22 was meant to keep the state from taking funds from cities.
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“The biggest thing is that it’s probably illegal,” said Ortiz. “It violates the idea of not balancing the budget on the back of cities.”
The League believes the bills will eliminate redevelopment agencies from the 462 cities they represent unless the cities agree to pay a “ransom” to the state.
According to League officials, “AB 1X 27 allows agencies to continue to exist if they agree to pay their share of $1.7 billion this year and $400 million annually in perpetuity.”
The League also believes, unless nullified, AB 1X26/27, will have a chilling effect on jobs and the economy. They say redevelopment investments statewide account for about 300,000 jobs in the private sector – not including jobs within City Hall.
“Shutting down those agencies is going to mean that major infrastructure projects that were on the drawing boards or which were underway are not going to go forward, a lot of private sector jobs are going to be eliminated as a result,” said Chris McKenzie, Executive Director of the League of California Cities.
According to the city, the jobs aspect of the bills will not have an impact yet.
“No projects are in jeopardy as a result of the action by the state,” Ortiz said.
However, Ortiz admits redevelopment funding has been an “incredible tool” for improving an area and they want that money available in the future.
The League says the Governor is desperate to find revenue and is willing to violate the will of the voters and betraying his own beliefs to do so.
“It’s beyond our understanding of how a ballot measure, that he actually as Attorney General at the time wrote the ballot Title and Summary for that the voters saw, that said they can’t do this. He has now proposed and signed a bill doing it. It’s just unfathomable,” McKenzie said.
The League says they offered a clear, constitutional way for the governor and the legislature to get some interim financial relief, but they say their idea was rejected without serious consideration.
That alternative was a system of payments by local redevelopment agencies to school districts that were in the redevelopment district areas.
“In exchange for that, the redevelopment agencies would get a period of extension on their redevelopment plan so they could make up for that lost revenue on the tail end of their plan,” McKenzie said.
Thursday’s lawsuit requested the California Supreme Court issue a stay to prevent the legislation from going into effect until the Court can rule on the merits of these claims.
The City of Santa Clarita remains optimistic.
“The hope is we will prevail,” Ortiz said.
The California League Cities believe the Governor’s actions are a “terrible misuse of legislative power”, but say the law is on their side.
“We feel the law is very, very clear and we hoping the Supreme Court of California agrees,” McKenzie said.