Turlock Mayor John Lazar joined elected officials from around Stanislaus County as they gathered in Modesto to support a lawsuit by the League of California Cities, California Redevelopment Association and two cities to overturn what they claim is the unconstitutional redevelopment elimination legislation (AB 1x 26/27).
On Monday, the League of California Cities (League), the California Redevelopment Association (CRA) and the cities of San Jose and Union City filed a petition with the California Supreme Court, challenging the constitutionality of AB 1x 26 and AB 1x 27, the two redevelopment bills passed as part of the state budget in June and signed by Governor Jerry Brown on June 29, 2011. ABx1 26 eliminates redevelopment agencies. AB 1x 27 allows agencies to continue to exist (albeit on life-support) if they agree to pay their share of $1.7 billion this year and $400 million annually in perpetuity.
The Turlock City Council held a special meeting on June 21, 2011, where they discussed the potential impacts to the City of Turlock if the Senate passed legislation, affecting the Redevelopment Agency (RDA), was accepted by Governor Jerry Brown.
Turlock City Manager Roy Wasden explained that Turlock’s budget will face a loss of over $1 million this year, in addition the $4 million that already has been take out of our local economy.
The Turlock RADA faces owing a whopping $3.2 million for the fiscal year 2011-2012, as estimated by the California Redistricting Association.
At the meeting, acting assistant to the City Manager, Turlock Police Lieutenant Steven Williams said, “We do not have $3.2 million available. So as it sits right now, we will not be able to make the payments proposed in the bills.”
According to the CRA, the central claim in the lawsuit is that AB 1x 26/27 violate Proposition 22, the constitutional amendment passed by 61 percent of California voters in November 2010, just eight months ago. Prop. 22 was passed by voters to "conclusively and completely prohibit State politicians in Sacramento from seizing, diverting, shifting, borrowing, transferring, suspending, or otherwise taking or interfering with" revenue dedicated to local government. The revenues protected by Prop. 22 specifically include the annual increments of property taxes allocated to California’s 400 redevelopment agencies.
"California voters overwhelmingly passed Prop. 22 just eight months ago to stop State raids, shifts and diversions of local redevelopment funds," said Chris McKenzie, executive director, League of California Cities. "The Governor and legislature have blatantly ignored the voters and violated the State Constitution. We must now go to the Supreme Court to uphold the voters’ will and the Constitution by overturning this unconstitutional legislation. We are confident the Courts will uphold the will of the voters."
“Time and again, the voters vote to stop the State from raiding, taking or otherwise redirecting local government funds,” stated Turlock Mayor John Lazar.
Lazar explained that in 2004, 84% of voters passed Prop. 1A but the state politicians ignored key provisions of the constitution and repeatedly attempted to raid local funds, including redevelopment monies.
“So cities organized again, and we placed an even stronger constitutional protection in Prop. 22, which passed the voters of California by 61% of the voters just eight months ago,” said Mayor Lazar. “Prop. 22 clearly and unequivocally prohibits legislation like AB 1x a, 26, and 27; the current legislation which raids local government funds.”
“Prop. 22 couldn’t be more clear, but the Governor and Legislature are not listening. So the cities are now forced to sue in the Courts to uphold the law of California – the state constitution, and the will of the voters,” stated Lazar. “It’s a sad day for Turlock and the State of California.”
Unless nullified, AB 1x 26/27 will result in the elimination of redevelopment agencies or force alleged "ransom" payments by local agencies that will greatly reduce the ability of local agencies to pursue revitalization and job-creation projects. The measures will kill hundreds of thousands of jobs and leave many communities with no opportunity to revitalize downtrodden areas with high unemployment, high crime and significant blight.
John Shirey, executive director, California Redevelopment Association, said: "Since the budget bills passed, many redevelopment agencies have notified us that they cannot afford the ransom payment and will cease to exist. And those agencies that are planning on making the payment tell us that it will greatly diminish their ability to pursue vital local projects. This legislation is a job-killer and an opportunity killer for many local communities in need. Fortunately, voters passed Prop. 22 to put a stop to these types of destructive raids by the legislature. We must now go to the Courts to protect our local communities and economies."
Joining as co-petitioners are the cities of San Jose and Union City. In declarations provided to the Court each city says that it currently anticipates being unable to make the payment required to avoid redevelopment agency elimination.
The city of San Jose declares that, unless overturned, AB 1x 26/27 could result in the forced termination of its redevelopment agency and kill hundreds of millions of dollars’ worth of vital redevelopment projects. These include the Strong Neighborhoods Initiative, a project to revitalize 20 of the city’s most disadvantaged and struggling residential neighborhoods; a flood control project needed to protect industrial properties; and several interchange widening projects near Hwy 101.
The city of Union City does not currently believe it will be able to pay the funds required to avoid elimination of its redevelopment agency. Elimination will kill the "Station District Plan" to create a transit-oriented development near BART and multiple rail lines, with planned housing, office, commercial development and pedestrian and roadway connections on formerly contaminated industrial land. This project has been in the planning and implementation process for several decades, and the agency has spent tens of millions of dollars. The Station District Project will remain unfinished if the agency is dissolved.
The cities of Brentwood, Oakland, Modesto, West Sacramento, and Guadalupe also filed declarations in support of the lawsuit.
The Petitioners’ counsel are Howard Rice Nemerovski Canady Falk & Rabkin, located in San Francisco. The petition was filed directly in the State’s highest court because expedited resolution is needed. Under the terms of AB 1x 27, cities with redevelopment agencies intending to make the "ransom" payment must notify the State by October 1. The petition asks the Supreme Court to make an initial ruling on the request for stay by August 15.