Redevelopment agency battle returns to court
September 26, 2012
The League of California Cities announced Monday that it filed a lawsuit in Sacramento County Superior Court against the state Department of Finance, Board on Equalization and Controller on the grounds that implementation of AB 1484 is unconstitutional.
AB 1484, signed into law by Governor Jerry Brown in June, 2011, called for the dismantling of community redevelopment agencies and the transfer of their funds back to the state to close the budget deficit. The California Supreme Court upheld the law last December, so the league is not seeking to eradicate it, but rather curtail its implementation and help communities recover some funds.
Executive Director Chris McKenzie says the implementation of AB 1484 is unconstitutional due to the power it gives the state to withhold money from cities for public safety and basic services, as protected by voter approved Proposition 1A (2004) and Proposition 22 (2010). The League of California Cities was one of the primary backers of Proposition 22.
San Luis Obispo County cities have lost millions in the dismantling of redevelopment agencies. Arroyo Grande, in particular, faces financial hardships. Standard & Poor’s downgraded Arroyo Grande’s credit rating last month from an A- to BBB due in part to its failure to set aside funds to compensate for the cash flow lost from its folded redevelopment agency.