Fight brewing over state money grab
August 4, 2009
SOUTH LAKE TAHOE – Under a budget passed last month, California could take more than $2 million in funding from the South Tahoe Redevelopment Agency over the next two years. But not without a fight, the South Lake Tahoe City Council said on Tuesday afternoon.
By a 5-0 decision, the council voted to allow city attorneys to pursue legal action against the state for passing a budget that would take $2.07 million from the redevelopment agency’s 2009-2010 budget and $426,000 from the agency’s 2010-2011 budget.
City Manager David Jinkens questioned the constitutionality of the state’s budget when addressing the council on Tuesday and said taking the redevelopment funds, as well as two other items in the state budget, would be “devastating” to the city.
A possible delay in payment from the state of more than $1 million in Highway Users Tax money used for city snow removal services and the state’s borrowing of approximately $752,000 from city property taxes with no guarantee the city will be able to borrow the money from another source may also be illegal, Jinkens told the council.
But the redevelopment agency funding, which is locally generated through the collection of property taxes, remains the biggest slice of the local pie.
Statewide, the California budget takes away $2.05 billion of taxes from the 397 active redevelopment agencies around the state, something that is unacceptable, said John Shirey, executive director of the California Redevelopment Association.
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“I can tell you they’re all upset 100 percent of the agencies are either shocked or angered about this horrendous action to take $2.05 billion,” Shirey said during a phone interview on Tuesday.
The association recently won a lawsuit that challenged a previous attempt by the state to use redevelopment dollars for it’s own purposes and the association expects to file a suit against the state for this attempt within the next 45 to 60 days, Shirey said.
Who will be party to the suit is not yet known, but the upcoming legal battle is expected to be discussed at an annual meeting of the California Redevelopment Association in Sacramento on Wednesday, Shirey said.
Whether South Lake Tahoe will sue the state on its own or join the California Redevelopment Association lawsuit should be determined in the next couple weeks, Enright told the council on Tuesday.
Enright said he would be traveling to the association’s meeting in Sacramento and would report back to them with additional findings at the council’s next meeting on Aug. 18.
Enright described the city’s position as “very sound” and said the South Tahoe development agency could lead the way in preventing California from taking local money around the state.
“I think we have an ideal situation to be a test case,” Enright said.
The attorney said he does not expect to file suit against the state on behalf of the redevelopment agency prior to reporting back to the council later this month.