Update: Brown Signs Budget Bills, Forces Redevelopment Agencies' Hand

 

After six months of debating and negotiating, Governor Jerry Brown today signed AB 1x 26/27, the pair of bills that would compel redevelopment agencies to make voluntary contributions to the state or else face elimination. Opponents of the budget trailer bill contend that the requested contributions would be so burdensome--totaling $1.7 billion this fiscal year--as to effectively end redevelopment in the state by putting all but the most financially solvent agencies out of business.  

They were included among eight budget trailer bills that the governor signed today. He has yet to sign the main budget bill, which the Legislature revised following his June 16 veto of their first attempt. The Democratic governor got no support from Republicans. Several legislators from his own party were reportedly wary of the redevelopment bills but ultimately relented. 

The budget bills call for $86 billion in expenditures and attempt to close what was a $9.6 billion gap. $1.7 billion of that amount is expected to come from redevelopment agencies' tax increments, either by voluntary payments or complete shutdown of agencies. Members of the redevelopment community insist that this choice is no choice at all. 

“Make no mistake about it: AB 1x 26/27 would lead to the elimination of redevelopment agencies throughout California," said California Redevelopment Association Executive Director John Shirey in a statement issued Monday. "Since the (legislative) passage of these bills, we’ve heard from dozens and dozens of agencies that will not be able to make the ‘ransom’ payment, and thus will be forced to shut down, eliminating hundreds of thousands of jobs in the process."

Shirey has vowed that CRA and other organizations will file suit if the governor signs the bills. He contends that they violate Proposition 22, which was designed to prevent the transfer to certain funds, including redevelopment agencies' tax increment, to the state. 

The governor has not yet made a public statement about the signing, nor has the CRA or League of California cities, both of which are expected to file suit to halt the implementation of the bills. 

CP&DR will have continuing coverage of the elimination of redevelopment.