The California Supreme Court is set to rule Thursday on a high-stakes challenge to two laws that would require the state’s 400 redevelopment agencies to give up $1.7 billion in property tax revenue this year and $400 million in future years.
The court announced today it will issue a decision in San Francisco at 10 a.m. Thursday in a lawsuit filed by the California Redevelopment Association and League of California Cities.
The two statutes were passed by the Legislature and signed by Gov. Brown in June to help solve the state’s $25 billion budget deficit.
The first law, AB 26, dissolves the state’s redevelopment agencies and diverts $1.7 billion in property tax revenue from them to schools, roads and firefighting in the current fiscal year.
The second, AB 27, allows the agencies to come back into existence if they agree to participate in transferring $400 million annually to the other programs, primarily to schools, in the future.
The redevelopment association and league of cities claim the laws violate a 2010 voter initiative, known as Proposition 22, that specifically barred the Legislature from seizing property tax revenue from redevelopment agencies.
The two organizations were joined in the lawsuit by Union City and San Jose.
The state government contends the Legislature had the right to dissolve the agencies because they were created by a 1945 law and are not protected by the California Constitution.
And it argues that the future $400 million payments by restructured agencies are not forced transfers because the agencies’ participation in the revamped program is voluntary.
The state high court could either uphold both laws, strike down both, or affirm the measure dissolving the agencies while overturning the law allowing their restructuring.
Julia Cheever, Bay City News