Monday, July 18, 2011

Bureaucrat-On-Bureaucrat Crime: California's RDAs Sue the Legislature and the Governor

We've been expecting it since before the new state budget was signed, but today the League of California Cities, the California Redevelopment Association, and the cities of San Jose and Union City filed a lawsuit with the California Supreme Court to block the abolition of the state's 425 redevelopment agencies, on the grounds that part of the plan enacted by the Legislature and Jerry Brown is unconstitutional.

Regardless of how you feel about the RDAs themselves (we're not fans, and were hoping they'd be given a quiet funeral), they have a pretty strong case. To review, the Legislature's plan to abolish the agencies came in two parts: AB 26X, which calls for an immediate halt to all RDA activities and sets October 1 as the date on which they close their doors; and AB 27X, which offers agencies the option of continuing to live if they make payments to state special funds for school, fire, and transit districts. The latter provision, which almost certainly violates Prop 22, is the lawsuit's focus. Blame a Legislature unwilling to cut other spending for this one.

An interesting wrinkle is what happens to the budget from here. The plaintiffs are asking the Court to put the law on hold until the dispute can be resolved, which could throw $1.7 billion of the budget into limbo. If the litigation is finished before October 1, we'd assume things will be okay: if it's successful, the RDAs get wiped out by AB 26X; if not, roughly 70 of them get wiped out and the rest put up with the revenue backfill. If the suit drags out past October 1, however, it's not clear that any portion of the abolition package could proceed. Once again, blame this on the Legislature.

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