CITY HALL — The Redevelopment Agency, under threat of losing $3.3 million in tax revenue to Sacramento as lawmakers try to close a $24-billion deficit, is expected to join a growing legal effort to protect the local money.
The League of California Cities, the California Redevelopment Assn. and other cities and counties argue a June 12 plan from the Legislative Budget Conference Committee is unconstitutional and can hinder further development in cities.
Under the proposal, the state would take almost $1.7 billion of city and county revenue from the Highway Users Tax Account over the next two years and seize $1.05 billion of redevelopment funds over the next three years.
Cities argue that the state’s seizure of local redevelopment increments for the state general fund would be in direct violation of California’s Constitution, which requires the money only be used for the benefit of redevelopment project areas.
Glendale has two redevelopment project areas, one along San Fernando Road, the other within the city’s center core, so the impact could be pronounced, city officials said.
The loss of the city’s gas tax money, roughly $3.3 million next year, would force a complete rethinking of how to maintain streets and promote development, they added.
“The impact could be pretty devastating,” said Councilman John Drayman, who serves as chairman of the Redevelopment Agency. “It could have a tremendous impact, aside from maintaining streets, because we would then have to potentially use the general-fund money to fund street and maintenance repairs.”
The City Council is in the process of closing a $9.7-million deficit of its own in the general fund, and city executives have warned that they could be back at the budget-cutting table in the coming months, especially if the state’s financial turmoil continues to worsen.
“Some of these programs would have to be placed so far on the back burner that they would be a distant memory,” Drayman said. “Obviously, this would require tremendous prioritizing.”
Another $6.9 million over the next three years could also be seized from the Redevelopment Agency’s ability to fund activities that provide goods and services to the community, create jobs, generate revenue for the general fund and pay for public improvements in streets, parks, recreational areas and libraries, officials said.
And while they said they recognize the state’s budget crisis is a problem, they argued it was unfair to continue to lean on already cash-strapped cities and counties.
“Historically the state doesn’t do anything to deal with its structural budget problems,” said Mayor Frank Quintero, who serves as the city’s liaison to the League of California Cities. “Instead, they turn to cities to solve the larger issues confronting the state. They’ve done this for many years. They keep taking money from municipalities where basically local services and quality-of-life issues are affected.”
If the Legislature and governor’s office end up taking the whole bag, the effect on an already fragile city government would almost surely mean real impacts to the public, Drayman said.
The Redevelopment Agency is scheduled to consider the issue at its meeting at 2:30 p.m. today in council chambers at City Hall, 613 E. Broadway.