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Appeal seeks to halt states money grab
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Manteca (Calif.) Bulletin
Manteca stands to lose another $1.3 million in redevelopment agency funds next year to Sacramento unless the Third District Court of Appeals overturns a $2.05 billion raid of RDA funds from agencies up and down California.

The California Redevelopment Agency (CRA) submitted its initial brief Monday in a bid to appeal the May 2010 Sacramento Superior Court ruling that upheld Assembly Bill 4-26 that shifted the RDA funds from local jurisdictions to Sacramento which in turn earmarked it for schools to cover the state’s $20 billion deficit.

“It’s an incredibly slippery slope,” Manteca City Manager Steve Pinkerton said of the state’s taking of RDA funds.

The state took $6,657,835 in RDA taxes collected from Manteca property owners earlier this year. If the CRA is successful it not only will block future state commandeering of RDA money but would force the state to repay what they took this year.

The state swiping of RDA funds put more pressure on Manteca to implement cost recovery charges for whatever planning services they can whether it is processing a water heater installation permit for a homeowner or a project map for a developer

Manteca has adequate reserves in its RDA accounts to still service debt and have money left over even after the state hijacks the money. There are more than a few municipal RDAs in California that don’t have that luxury and will face defaulting on their RDA debt.

In 2009, the Sacramento Superior Court ruled against the state because they simply said they were going to take the money and use it to balance the budget. State law prohibits RDA money to be used for anything other than what RDA rules allow as written by the California Legislature.

The state simply rewrote the rules. Their plan shifts the money in every RDA agency boundaries to the local school system and then reduces the state funding to the school district by the same amount. The end result is $2.05 billion to help go toward other state budget needs.

The CRA in a release noted that under the complex payment transfer terms of ABX4-26, the $2.05 billion was divided into two payments: $1.7 billion in 2010; $350 million in 2011. In each of the two years, redevelopment agencies are forced to turn over their funds to local county auditors. County auditors then transfer that money into a special fund, the Supplemental Educational Revenue Augmentation Fund (SERAF). SERAF funding then is turned over to school districts in redevelopment areas. Finally, the State lowers its contribution to those same school districts by an equal amount.

The state has been repeating the strategy of taking from local agencies in deficit situation since the early 1990s. Manteca alone has lost over $18 million in local revenue in the last two decades to the state balancing their budget on the backs of local government.