Cities Object to State’s Denial of Legitimate Obligations for RDA Assets; Foraging for Non-Existent Funds?

Cities have raised objections left and right to the messy and poorly executed winding down process for redevelopment while the state has tried to get its hands on as much money from redevelopment agencies as possible in an administrative process under AB 1484 that has raised serious concerns. Senate President Pro Tem Darrell Steinberg is quoted as saying in a recent Bee article that cities have partly objected to AB 1484 because they don’t want to help the state fix its budget mess, but Steinberg seems to be ignoring a very valid point from cities and the League of Cities: the state is scrounging for money that simply isn’t there and in the process is further deteriorating relations with cities by giving the Department of Finance an unprecedented grant of power.

We’ve relayed previously the funds that the state budgeted for from RDA-elimination are nowhere to be found. Figures released from the Administration last month indicated that the savings from the dissolution of redevelopment simply fell way short of expectations; in fact, only about one-third of the funds the state expected to snatch up have been collected.

And the state's decisions on what contracts are enforceable have provoked outrage and litigation from cities because the Department of Finance now has the power to eliminate or modify an enforceable obligation and to simply help itself to city tax revenues despite the fact that many cities argue legitimate obligations are being denied. Folsom City Attorney Bruce Cline states, “The biggest problem with this statutory scheme is all these powers in the hands of the state. We're experiencing the Department of Finance saying 'No' at many, many turns to things that are completely legitimate obligations."

Many local infrastructure and affordable housing projects should qualify but are hitting complications or a wall from the state. Steinberg is quoted as saying that cities have no right to complain and that “it's not their [cities’] money. It's not our money. It's the state taxpayers' money.” It is indeed taxpayer money and based on the dismal approval rating of the state’s legislators and the routinely unbalanced state budgets, Steinberg seems to incorrectly imply taxpayers should have more confidence in the fiscal management of the state over local governments.

Coverage of disputes over redevelopment money in Fresno can be found here.

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