State Budget Passes, CV Redevelopment Cut

The California legislature voted Wednesday to pass a state budget that eliminates statewide redevelopment funding—including funds earmarked for Castro Valley's downtown merchants—as well as culls from social services, public safety and the state's university system.

The new spending plan shifts more responsibility to local governments while eliminating or reducing funding for them.

A July 7 meeting for Castro Valley's downtown merchants has been canceled, an Alameda County official confirmed on Wednesday. The meeting had been part of a new effort by county redevelopment staff to from Castro Valley's downtown project. That campaign is now suspended.

The new state budget eliminates redevelopment agencies throughout the state.

More information on local redevelopment’s near-term future will be available at the Castro Valley Citizens Advisory Committee meeting on Wednesday, July 13, 12:30 p.m. in the Castro Valley Library.

To see Alameda County's official response to the state budget decision, click on the PDF at right. (You can enlarge and zoom in on the PDF, as needed.)

In the county's response, which was released Wednesday night,  County Administrator Susan S. Muranishi said the state "calls for shifting responsibility for housing thousands of criminal offenders and for some health and human services programs to local government, while long-term funding to carry out this change apparently will be sought through a ballot measure in November that is not guaranteed to succeed."

The new budget would close California's $9.6 billion budget deficit, relying in part on the state's sunny forecasts of $4 billion in additional revenue—but would trigger further cuts to K-12 education and social services if expected revenues are not met, according to The Sacramento Bee.

In that scenario, state-sponsored school buses would disappear and the academic year would lose seven days. 

The final spending plan did not include tax extensions that had been a linchpin in the plan Gov. Jerry Brown presented in January. Extending taxes would have required bipartisan support, support the Democratic governor couldn't muster.  

Instead, state sales and vehicle taxes hikes enacted in 2009 that Gov. Brown had hoped to extend will expire this week. 

The Los Angeles Times points out there will be new, if more modest, taxes. Buy your shoes from Zappos? Prepare to pay state sales tax. Is your home protected by CalFire services? Break out your billfold—it's going to cost you an extra $150. Registering a vehicle will cost an extra $12, but none of it will come close to closing the shortfall.

Lawmakers hope that eliminating redevelopment agencies across the state, another hotly contested core tenant of Gov. Brown's January plan, will bring in an additional $1.7 billion. 

Both the governor and lawmakers conceded that the budget won't solve California's protracted financial problems. But State Treasurer Bill Lockyer lauded the spending plan to the Times as a "very important step in restoring California state government to fiscal good health."