With less than three weeks left before the Legislature wraps up its regularly scheduled session, we're watching three things: the Highway Users Tax Account, redevelopment and the Democrats' water package.
The Highway Users Tax Account (HUTA) is funded by the gasoline sales tax and provides about a billion dollars annually to cities and counties for basic road maintenance. The budget deal cobbled together by the "Big 5" let the state keep all HUTA funds this fiscal year and $750 million next year – a shift of money that could devastate local public works departments. But after the Senate approved it, the idea died in the Assembly during the budget marathon in late July.
Never say die in Sacramento. After Gov. Schwarzenegger blue-penciled an additional $500 million from the budget, Senate President Darrell Steinberg (D-Sacramento) sued him, contending that the last-minute cuts were illegal.
Although Steinberg has a legislative counsel's opinion backing him up, the lawsuit may be little more than a tactic to get the proposed HUTA fund shift back on the negotiating table. After all, if the money transfer had been in place, the governor – at least in theory – would not have unilaterally whacked the budget. And word in Sacramento is that the proposed shift is in play again. (Fox and Hounds Daily's John Wildermuth forecast this 10 days ago, although I think California City News was the first to predict it.)
I suspect, however, that the HUTA issue will be only one part of a larger reconsideration of budget items that could include the City of Industry's redevelopment legislation. This bill would allow redevelopment agencies to extend the lifespans of project areas by 40 years – whether or not blight remains – in exchange for giving the state 10% of the tax increment. Industry's bill, ABx4 27, officially died when the Legislature approved the budget without it. Unofficially, however, the legislation is very much alive.
Industry's measure would be the most important piece of land-use legislation approved in at least a generation because it would eliminate the link between redevelopment and blight. Under it, such redevelopment tools as eminent domain and development subsidies could be deployed whether or not an area were run-down or neglected. The bill could even entice a city council to focus its "redevelopment" energies on areas with the greatest potential to generate revenue – the exact opposite of true redevelopment.
Finally, there is the package of Bay Delta and water bills carried by Democratic lawmakers that I wrote about in our most recent edition. The ambitious package seeks to change state water policy – but I don't see it becoming law this year. That said. the bills set the stage for some real decisions about the Delta and California water in 2010. As Assembly Water, Parks and Wildlife Chairman Jared Huffman (D-San Rafael) told me earlier this year, "I don't know if it will happen this year, but this is the two-year session to get it done."
One more thing to keep in mind: Schwarzenegger has promised to call a fifth special session of the Legislature after the Commission on the 21st Century Economy (a.k.a. The Tax Commission) issues its final report, which is due September 20.
- Paul Shigley
