SH RDA required by legislators to give State $5.16 million

The Signal Hill Redevelopment Agency was forced to give the State of California $5.16 million on Monday as state legislators continue to look at local funds as an easy way to balance the state budget. The State has an estimated $18–$20 billion budget deficit because of declining tax revenue due to the ongoing recession and high unemployment. The $5.1-million required payment is a result of the State’s decision to raid $2.05 billion in local redevelopment funds as part of the 2009–10 State budget.
The State has an unemployment rate of 12.6 percent, and the Signal Hill/Long Beach area is even higher at 13.5 percent. With high unemployment, fewer people are paying taxes and making purchases, which is resulting in declining sales-tax revenues. Instead of allowing redevelopment agencies to put people to work by funding public-improvement projects or through urban-revitalization projects, this money will now be used by the State to pay its bills. The State has no plans to repay the money.
“The Signal Hill Redevelopment Agency has effectively created jobs and enhanced revenues for the City and the State. The Redevelopment Agency has turned blighted and contaminated properties into uses that benefit the community,” said Tina Hansen, chair of the Signal Hill Redevelopment Agency. “Costco and the Signal Hill Auto Center are examples of successful Redevelopment Agency projects. These businesses employ nearly 1,000 people and generate significant sales-tax revenues that help fund critical State and City programs such as public safety, education, road repair, park maintenance, and youth and senior programs.”
“Taking this funding will stall job creation efforts in Signal Hill at the worst possible time,” said Mayor Ed Wilson. “The money taken by the State to fund State obligations was going to be used for local revitalization projects that would have improved our community, created jobs and stimulated our local economy.”
The payment was made in accordance with a ruling by Sacramento Superior Court Judge Lloyd Connelly last week which instructed local redevelopment agencies to abide by the provisions of ABX4-26, passed last year as part of the state budget. The bill allows the State to take $2.05 billion in redevelopment funding to use for State obligations. The California Redevelopment Association (CRA) is appealing the Superior Court ruling to the Court of Appeal.
“It’s incredibly short-sighted of Sacramento to reach into the pockets of local redevelopment agencies, one of the state’s strongest job-creating engines, at a time when job creation and economic development are desperately needed,” Wilson said.
According to Hansen, the Signal Hill Redevelopment Agency is actively acquiring 25 acres of blighted property for future economic development. “The $5.1 million taken by the State could have been used to hire contractors to clear the properties of abandoned oil wells, contamination and debris in order to make the properties suitable for development that will create jobs and generate new revenue,” said Hansen. “Without the involvement of the Redevelopment Agency, these properties would likely remain blighted and undeveloped for the foreseeable future.”
California Redevelopment Association Executive Director John Shirey vowed to fight the Superior Court ruling. “We strongly disagree with Judge Connelly’s ruling which effectively says the Legislature has unlimited discretion to redirect local redevelopment funds to any purpose it wishes,” he said. “Under that logic, any state program could be called redevelopment. The Legislature needs to deal with its budget problems by making hard decisions using its own limited resources– not by taking away local government funds. Despite this ruling, we continue to believe taking local redevelopment funds and using them to fund State obligations is unconstitutional. We have a strong case and feel confident the lower court ruling will be overturned by the Court of Appeal.”

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