California Supreme Court to hear redevelopment argument

November 8, 2011

With San Luis Obispo County’s five redevelopment agencies slated to lose a combined $4.5 million, local officials are watching as the California Supreme Court this week listens to arguments that the decision by state lawmakers to use redevelopment funds to help close a multibillion-dollar budget deficit was unconstitutional.

On Thursday, the state court will hear allegations in a lawsuit brought by the League of California Cities and the California Redevelopment Association that seeks to prevent the legislature from diverting funds earmarked for redevelopment to schools and local government.

The case has resulted in a temporary halt to lawmakers’ budget plans involving redevelopment funds. The plan was to take $1.7 billion from the agencies for redistribution.

If enacted, those budget cuts would virtually eliminate the state’s 400 redevelopment agencies.

The organizations contend that the cuts violate Prop. 22, passed in 2010 by voters, which prohibits the state from raiding transportation, redevelopment or local government money.

If the justices agree that the legislators’ money grab was unconstitutional, the decision would result in an additional $1.7 billion hole in the state budget.

And if the Supreme Court backs the legislature, most redevelopment plans throughout the state would be terminated because of lack of funding.

Last fall, most city officials in SLO County made clear their intent to oppose the fund shift, and the area’s state senator, Sam Blakeslee, R-San Luis Obispo, voted against it during budget debates.

“As our state struggles to recover from the recession, wholesale elimination of these agencies is the wrong path to pursue,” Blakeslee said at the time.