City Spending

California Fixing to Have to Pimp-Slap Cities to Get Redevelopment Funds Back

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That's Gov. Jerry Brown on the right.

One of the few correct calls California Gov. Jerry Brown has made in his return to office – eliminating the corrupt redevelopment agency system and returning the money to the state (to be directed back to union interests the schools) – may require Brown to send goons to city halls across the state to beat the money out of government officials.

After Brown successfully killed off redevelopment agencies across the state, the tax money they were redirecting to their various scams projects did not automatically revert back to their original sources. The state tasked each municipality with a redevelopment agency to determine what their "enforceable obligations" were. Which contracts did the redevelopment agencies get themselves into that must be continued by their cities even after the agencies were dissolved?

As The Orange County Register discovered, cities are pretty much trying to claim everything under the sun as an enforceable obligation, and the state is challenging cities' efforts to keep from having to stop spending money on certain projects. In Orange County alone, the state is challenging nearly $2 billion in claims of enforceable obligations. (Teri Sforza does an excellent job documenting all the challenges for The Register. Every metro paper in California should do this.)

Furthermore, the state is discovering that several redevelopment agencies appear to have rushed to enter into new agreements after the law dissolving the agencies passed and cities are trying to preserve them.

Given California's budget deficit of $16 billion (it's probably higher by now), the state needs to wring this money out of the cities to try to get its house back in order or else it might have to do something crazy like actually reduce spending.

Tim Cavanaugh wrote in January about the massive debts redevelopment agencies have built up in California and what can be done about it.