Capitol Alert
The latest on California politics and government
July 18, 2011

Redevelopment agencies filed suit Monday in California Supreme Court to prevent California from squeezing $1.7 billion out of nearly 400 local entities to help solve the state’s budget deficit.

The agencies, which subsidize construction in downtrodden areas, had vowed to challenge the state ever since Gov. Jerry Brown proposed eliminating them altogether in January. Cities were fiercely opposed to the move, while Brown and Democratic lawmakers said the money should go toward basic needs rather than private projects.

The governor and legislative Democrats ultimately agreed on a plan that allows agencies to survive so long as they contribute an estimated $1.7 billion to schools and local governments this fiscal year, followed by $400 million annually thereafter. California plans to reduce the funds it provides to schools by a like amount, thereby saving the state money.

The California Redevelopment Association and the League of California Cities were joined Monday in their suit by San Jose and Union City. The two Bay Area cities contend that they are unable to make the payments and would face elimination under the plan.

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