Court Ruling on Redevelopment Agencies Impacts Counties
Last week, the California State Supreme Court ruled on the status of redevelopment agencies (rda’s). Specifically, the Court upheld the Legislature’s ability to abolish them under the perimeters of AB 26X; however, the Court also ruled that AB 27X, which reconstitutes the agencies and redirects money from rda’s to the State, is unconstitutional and violates Proposition 22. In light of this ruling, counties with active redevelopment practices (whether via a county rda and/or a city rda) are now responsible for figuring out the allocation of property tax increment levels within the county. Furthermore, that determination must be done quickly. Determining the level of outstanding debt that was issued by an rda and how much property tax increment can be devoted to that debt is of primary concern. It is also expected that proponents of rda’s will ask the Legislature to enact statutes to revive the practice of property tax increment financing. It is unclear , however, how this effort would be received in the Legislature and by Governor Brown.
For more information, please contact Paul A. Smith at 916-447-4806.