On Monday, the two groups, which were joined by the cities of San Jose and Union City, filed a petition with the California Supreme Court, challenging the constitutionality of AB1x 26 and AB1x 27, the two redevelopment bills passed as part of the state budget last month and subsequently signed by Gov. Jerry Brown.
The cities of Brentwood, Oakland, Modesto, West Sacramento and Guadalupe also filed declarations in support of the lawsuit.
The suit alleges that AB1x 26 and AB1x 27 are unconstitutional, and seeks to have the court issue a stay by Aug. 15 to prevent the legislation from going into effect until the court can rule on the suit's merits.
If the bills aren't nullified, the plaintiffs claim that more than a billion dollars will be raided by the state, and thousands of jobs will be eliminated and leave many communities with no opportunities for revitalization.
“California voters overwhelmingly passed Proposition 22 just eight months ago to stop state raids, shifts and diversions of local redevelopment funds,” said Chris McKenzie, executive director, League of California Cities. “The governor and legislature have blatantly ignored the voters and violated the State Constitution. We must now go to the Supreme Court to uphold the voters’ will and the Constitution by overturning this unconstitutional legislation. We are confident the Courts will uphold the will of the voters.”
The plaintiffs are claiming that the two bills violate the constitutional amendment Proposition 22, which 61 percent of California voters approved last November.
The language of Proposition 22 said it is meant “conclusively and completely prohibit State politicians in Sacramento from seizing, diverting, shifting, borrowing, transferring, suspending, or otherwise taking or interfering with” revenue dedicated to local government.
The revenues protected by Proposition 22 specifically include the annual increments of property taxes allocated to California’s 400 redevelopment agencies, according to the plaintiffs.
AB1x 26 eliminates redevelopment agencies, while AB1x 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, according to a statement from the plaintiffs in the case.
Last week, the Lake County Board of Supervisors agreed to have staff bring back an ordinance to enter into the Voluntary Alternative Redevelopment Program created by AB1x 27. That ordinance is on the board's Tuesday agenda.
County Administrative Officer Kelly Cox, who also is the executive director of the county's redevelopment agency, said it appeared to be the only option that would allow the county's redevelopment agency to survive and to move forward on projects, which have been stopped in their tracks since the governor signed the bills last month.
Under the alternative program, Cox told the board that the Lake County Redevelopment Agency would lose an estimated $1,035,867 in fiscal year 2011-12 and $243,573 per year in future years, amounting to what he called a “very substantial reduction” in funding.
The Lakeport City Council is set to discuss its own options for saving the Lakeport Redevelopment Agency at its Tuesday night meeting.
In his report on the discussion, city Finance Manager Dan Buffalo called the payment the city would be expected to make in the alternative program a “ransom” payment, the same language that the league and the association are using to describe it.
The cities of San Jose and Union City both have made declarations to the court that they will not be able to make the required payments to avoid the elimination of their respective redevelopment agencies.
John Shirey, executive director of the California Redevelopment Association, said that since the budget bills passed, many redevelopment agencies have notified the association that they cannot afford the ransom payment and will cease to exist.
“And those agencies that are planning on making the payment tell us that it will greatly diminish their ability to pursue vital local projects. This legislation is a job-killer and an opportunity killer for many local communities in need,” he said.
Cox said the county was notified of the lawsuit. They were not asked to join, although he said Lake County could if it wanted to do so.
If the board approves the ordinance on Tuesday to enter the Voluntary Alternative Redevelopment Program, Cox said it will provide the county with the ability to get back to work on its projects, although it will have far less money available for one year under the program.
“If the stay is granted it will mean that we don’t have to make the payments to the State required by AB1x 27 and that we can continue with business as usual,” he said.
He added, “However, I don’t believe we really can or should go back to business as usual until there is a final resolution to these issues and we know what the state’s next move will be. I have a feeling they will try something else – another way to take our redevelopment agency revenues.”
In the meantime Cox thinks Lake County should take a very conservative and cautious approach in spending redevelopment agency funds.
“We’ll be slowed, but our county redevelopment agency won’t be out of business even if the CRA lawsuit fails,” he said. “We are also looking hard for supplemental grant funds to help us with some of our current and future projects.”
E-mail Elizabeth Larson at
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