We interrupt our usual flow of rumors, allegations, and unnamed sources for some actual news: the Merc’s Howard Mintz reports that the California Supreme Court is set to rule on the fate of redevelopment tomorrow morning at 10 AM. During the hearing, I felt there was the distinct possibility that redevelopment could be eliminated entirely. If you think I’m being Chicken Little about the issue, you should know that I’m not alone:
Can’t predict, but us journos at CA SupCt last month all felt justices inclined 2 zap redevelopment altogether. #cabudget
— John Myers, KQED (@KQED_CapNotes) December 28, 2011
Of course, journalists and bloggers handicapping redevelopment’s chances don’t amount to a hill of beans, so we’ll have to wait until tomorrow morning for the reckoning. Until then, we can at least lay out the possibilities. Remember that the future of redevelopment will be dictated by how the Court rules on two bills passed during the legislative session, ABX26 and ABX27. ABX26 dictates how redevelopment-related tax increment will be funneled back to either the state or local school districts to help shore up their budgets for the next five years. ABX27 creates the “Voluntary Alternative Redevelopment Program” which allows cities and counties to continue redevelopment work if they first make required payments under ABX26.
- Both ABX26 and ABX27 are upheld. Redevelopment agencies that have chosen – in advance – to pay the state’s “ransom” payment can continue to operate redevelopment agencies, though their ability to fund new projects will be hampered by the redirect of tax increment to the state/schools. Roughly 90% of RDA’s throughout the state have indicated that they can and will comply with this plan. Oakland is one of those cities, San Jose is not.
- Both ABX26 and ABX26 are struck down. Redevelopment agencies can go back to “normal”, and the state, already scrambling for funds in the face of lower-than-projected revenues so far this fiscal year, would have to look to raid someone else’s cupboard.
- ABX26 is upheld, ABX27 struck down. This outcome effectively scuttles redevelopment since it does not specify or provide a new alternative form of redevelopment. This is the worst possible outcome for RDAs all over the state, and the best for the state. Redevelopment would have to make a comeback through new legislation, which would take at least another year to enact.
- ABX26 is struck down, ABX27 is upheld. This doesn’t appear to be much different from striking down both bills, since ABX27 is dependent on ABX26 to be effective. ABX27 also sets up an agency in every county to make sure ABX26 is enforced properly in terms of payments to the state, so it’s hard to see how it has any teeth if ABX26 is killed.
We’ll see how it plays out tomorrow. Until then, I’ll let you cry over the Bailey trade.