Legislative Counsel Sees Issues in Plan To Shift Redevelopment Funds
California's Legislative Counsel Bureau recently released a memo claiming that Gov. Jerry Brown's (D) plan to eliminate redevelopment agencies is unconstitutional because the state cannot reimburse itself using local property tax, the Sacramento Bee's "Capitol Alert" reports (Yamamura, "Capitol Alert," Sacramento Bee, 5/3).
In March, Brown signed legislation to reduce state spending by $11.2 billion. The measures included deep cuts to several health programs.
The governor now is working to close the state's remaining $15.4 billion deficit (California Healthline, 5/3).
Brown's deficit-reduction plan aimed to eliminate redevelopment agencies, which use property tax revenue to fund local development projects. The governor planned to use the property tax revenue to address California's budget gap and eventually increase payments to schools and local government services.
The governor's plan also called for local governments to send $1.7 billion in redevelopment money to the state in 2011-2012 as reimbursement for health care and trial court services.
The redevelopment proposal (SB 77) remains stalled in the state Legislature.
Details of Memo
In its memo, the Legislative Counsel said lawmakers could not force local governments to send redevelopment funds to the state.
Although Brown's plan would establish trust funds to collect the tax revenue before sending it to the state, the plan still is "not sufficient" to comply with the state constitution, according to the memo.
H.D. Palmer, spokesperson for the Department of Finance, dismissed the Legislative Counsel's allegations, stating that Brown's proposal was "crafted in such a way we think it will withstand any legal challenge" ("Capitol Alert," Sacramento Bee, 5/3).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.