Supreme Court to Rule on Redevelopment Laws

Cities will anxiously await Thursday’s Supreme Court ruling as the high court is expected to reach a decision this morning at 10 a.m. on the legality of two new laws that would determine the future of community redevelopment agencies.

The court is considering whether the laws, passed by the Legislature earlier this year, are invalidated by Proposition 22, which bars the state from seizing local tax money. Redevelopment agencies are funded by the increase in tax revenue generated by projects in their areas.

One statute – AB26 – forces redevelopment agencies to close, while the other – AB27 – allows local officials to keep them open if they make payments to the state.

Glendora city officials have referred to the latter as “paying a ransom” – an estimated $2.6 million in first year payments -- to free redevelopment funds they believe is rightfully the city’s. 

“It’s either pay the ransom in AB27, or AB26 and be a hostage,” Councilmember Karen Davis said in July. “While neither of them are desirable that’s what we’re left with.” 

City Manager Chris Jeffers called AB26 a worst case scenario, which “will have repercussions up and down the state.”

Supporters of the laws, including Gov. Jerry Brown, say the money is better used to fund schools and other municipal functions during tight budgetary times. They cite a state analyst's report that shows the cost of redevelopment growing without any tangible economic benefit to the state.

“If the state is allowed to move ahead it will appear the court will have ignored the will of the people in overwhelmingly passing Prop 22, which attempted to block state raids of local funds,'' said CRA/LA spokesman David Bloom. “At least the decision will provide some clear resolution after a year of uncertainty and allow the city's most important economic development tool to get back to full operation, if at a diminished level.''

-- From City News Service reports.