Sandra Emerson, Inland Valley Daily Bulletin
Created: 10/28/2011 05:13:30 PM PDT

CLAREMONT – The issue facing redevelopment agencies across the state may boil down to one question – where should property taxes be allocated?

Attorneys representing the state’s view as well as redevelopment advocates’ view are expected to battle it out in the state Supreme Court on Nov. 10, but a panel discussion held Friday at the DoubleTree Hotel may have given a glimpse into what will be argued in court.

A panel of five officials representing the state’s interest, local interest and the California Redevelopment Association discussed the issues surrounding the redevelopment agency debate during the discussion hosted by the University of La Verne and American Society for Public Administration.

“This is really not a fight about redevelopment. It’s a fight about money, and it’s especially about what’s called tax increment financing,” said T. Brent Hawkins, general counsel for the California Redevelopment Agency.

Redevelopment agencies oversee infrastructure improvements, economic development and affordable housing in cities and counties.

Tax increment is the amount of increased property taxes raised through a redevelopment project that in part is used to pay off bonds issued by an agency.

As part of Gov. Jerry Brown’s 2011-12 fiscal year budget, legislators in June passed two bills that would change or eliminate the more than 400 redevelopment agencies in the state.

The first bill eliminates redevelopment agencies altogether, but allows cities to continue some form of redevelopment agency or go without.

The second bill forms an alternate redevelopment agency for cities that decide to continue with redevelopment. However, they will be required to pay 40 percent of its revenue to the state.

The payments to the state would total $1.7 billion in the first fiscal year and about $400 million per subsequent year.

California Redevelopment Association and League of California Cities filed a lawsuit in July citing the second of the two bills violates Proposition 22.

Proposition 22 was passed by voters in November prohibiting the state from taking redevelopment fund money.

The organizations also claim the bill is violating the state Constitution, which says property tax increment must be put in a redevelopment agency fund and used exclusively for repaying debts incurred by the redevelopment agency to carry out projects.

The state Supreme Court expects to have a decision by Jan. 15, which is the deadline for the first payment to the state.

To read entire story, click here.