Redevelopment Agencies Not Going Quietly

Wind-down of redevelopment agencies not going smoothly

by Brian Leubitz

When Gov. Brown announced, and eventually passed into law, his plan to end the redevelopment agency program, he had big plans for that money. Some went to education, and then various pots among the local governments.  Everybody in Sacramento knew that when you were dealing with physical construction, there were going to be some transitional difficulties. But, perhaps this is more than was expected:

Among audit findings so far, the controller has found that Fresno inappropriately transferred $41.5 million to the city's housing agency and San Jose improperly transferred $148 million.

The audits suggest that the cities should not have kept that money for their own use but rather should have surrendered it to be distributed among various local government entities, as the Legislature intended.

In response, state finance officials have sent more than 40 letters warning cities that the state will begin withholding sales tax revenue if they do not transfer the amounts the state says they owe. Department of Finance spokesman H.D. Palmer said withholding tax revenue was a last resort and that the state would rather negotiate with the local governments. (Judy Lin / AP)

Adding to this fight is the fact that latest estimates that the dissolution will only bring in around 2/3 of what was originally predicted. Eventually, after the lawsuits wrap up, this will all be something of a sour chapter in the continuing balance between state and local governments in California. In the meantime, there is plenty of money left on the table.