By Jim Miller
Published: Monday, Jan. 20, 2014 – 8:22 pm
The unwinding of California’s former anti-blight program has become a grinding courtroom fight involving more than 100 active lawsuits, with the state in recent weeks suffering legal setbacks that ultimately could cost it billions.
In the budget proposal he unveiled earlier this month, Gov. Jerry Brown warned that the state faces a hit of more than $3 billion if courts uphold rulings against parts of laws that eliminated the decades-old program known as redevelopment.
A December ruling puts in doubt the state’s ability to take a jurisdiction’s sales tax revenue if it refuses to shift former redevelopment money. Another ruling last month would shield any redevelopment money transfers that took place before the June 2011 law dissolving the program took effect.
The complex legal fights underscore that, two years after the California Supreme Court upheld the main state law eliminating redevelopment, the dissolution process is as contentious as ever. Some cases are destined for appellate courts or higher. Local governments, meanwhile, continue to invoke Proposition 22, the November 2010 initiative that enshrined local revenue protections in the state constitution but failed to prevent redevelopment’s elimination.
“It’s not every day that you shut down a $5 billion industry overnight, an industry that has tens of thousands of existing contracts,” said Brent Hawkins, a municipal law attorney who has worked on some of the cases. Adding to the turmoil, he said, is that the legislation eliminating redevelopment “was poorly conceived and poorly drafted.”
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