The California Supreme Court today upheld a law that dissolves the state's 400 redevelopment agencies and allows the state to seize $1.7 billion in property tax revenue to fund schools and special districts.
But the court struck down a second law that would have enabled the agencies to come back into existence if they agreed to contribute $400 million annually in future years to schools, transit and firefighting programs.
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The panel said the second measure violated a 2010 voter initiative that barred the state from diverting property tax revenues from redevelopment agencies.
Justice Kathryn Werdegar wrote that the Legislature had the power to terminate the agencies, but did not have the authority to require mandatory payments as a condition of future existence.
Both laws were enacted by the Legislature and signed by Gov. Jerry Brown in June as steps to help close the state's $25 billion budget deficit.
The state high court issued its ruling in San Francisco in a lawsuit filed by the California Redevelopment Association, League of California Cities and the cities of San Jose and Union City.
While the ruling is good news for Brown and his camp of lawmakers, it may have detrimental effects on cities who used redevelopment funds for key development projects.
Many local projects, including the "Ashland Youth Center, Castro Valley Library, and many streetscape and sidewalk improvements" were made possible through the support of the Alameda County Redevelopment Agency .
Dissolving the local agency would greatly impact several projects in the works in the Eden Area including a firehouse and a community center in Cherryland; a streetscaping project along East 14th Street in Ashland; the long planned development of the Bohannon properties in downtown San Lorenzo; the Meekland Avenue Master Plan.
Bay City News contributed to this report.