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Judge: State can take $8.1M from Manteca redevelopment
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Manteca is taking an $8.1 million hit thanks to a Sacramento Superior Court judge siding with Governor Arnold Schwarzenegger.

The money the city will lose is part of $2.05 billion in redevelopment agency funds statewide that Judge Lloyd Connelly – the same judge who blocked a similar RDA raid by the state last year – ruled on Tuesday the state can take to help balance the $20 billion deficit.

Manteca’s hit for the current fiscal year is $6,657,835 and $1.4 million for next year. City Manager Steve Pinkerton noted 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.

Pinkerton pointed out that Manteca RDA just had a vote of confidence by investment firms that reacted favorably to Manteca RDA due to the stability and solid cash flow position even with the possibility of the theft of $8.1 million in funds by the state.

Last time around, the judge 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 rewrites the rules. Their plan is to shift the money in every RDA agency boundaries to the local school system and then reduce the state funding to the school district by the same amount. The end result is $2.05 billion to go toward other state budget needs.

Pinkerton noted there are some RDA project areas in California that don’t even have schools within their boundaries. However, the judge wasn’t swayed by that.

The California Redevelopment Agency will decide by Friday if they believe there is merit to appeal the judge’s ruling.

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.

Measure qualifies for state ballot
A measure has qualified for the November ballot that would effectively block future raids on local revenue.

A Manteca Chamber of Commerce resolution adopted last year in support of the ballot measure notes that voters previously have passed measures to prevent the state from taking local revenues dedicated to funding local services and transportation improvement projects yet the state continued to seize billions.

The resolution also notes the impact that the borrowing and raids on local government money had this year in the form of public safety layoffs, fire station closures, and delays in road improvement, stalled economic development, and a reduction in other municipal services.

The resolution states in part that “politicians in Sacramento have continued to ignore the will of the voters, and current law provides no penalties when state politicians take or borrow these locally dedicated funds.”

The ballot measure would close loopholes and change the constitution to prevent state politicians in Sacramento from seizing, diverting, shifting, borrowing, transferring suspending, or otherwise taking or interfering with local tax revenues. That includes redevelopment, general fund money, transportation improvement projects, and mass transit.