California's relentless, ever widening budget deficit has claimed another victim: redevelopment's affordable housing funds. 

Released today, Gov. Jerry Brown's revised draft (pdf) of his 2012-13 budget addresses a deficit that has risen to an estimated $15.7 billion, up from an estimated $9.2 billion at the beginning of the year. The May appropriates all remaining cash assets that had been held by redevelopment agencies. This move effectively does away with funds that many had hoped--and expected--would be preserved even as redevelopment itself had been dissolved. Roughly $1.4 billion currently sits in the former redevelopment Low & Moderate Income Housing Fund. 

Senate Bill 654, sponsored by Senate Pro Tem Darrel Steinberg (D-Sacramento), would have restored the housing fund to localities that had sponsored redevelopment agencies. It is currently is under consideration in the legislature, having passed out of committee but failing to win urgency designation. SB 654 had received widespread support from both cities and affordable housing activists. Preservation of affordable housing had been considered by many to be the one part of redevelopment that had to be salvaged. 

If adopted, the budget revise would appropriate all monies in the trust fund, thus rendering SB 654 moot. 

As Bill Fulton reported in March, Steinberg recently said, "I don't know what the May revision [of the state budget] is going to say about the state's revenue. If May keeps us stable, then boom – aggressive all the way to the governor's desk and I think he would likely sign the bill. If however growth is slow, we're going to have difficult decisions to make."

It would appear that those difficult decisions are in the offing.