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Manteca paying $5.8M ransom
State Supreme Court could save city money
A $200,000 RDA loan, since paid back with interest, was key to making the $2.1 million investment into the Kelley Brothers Brewing Co. work. - photo by HIME ROMERO

City Manager Steve Pinkerton doesn’t mince words when it comes to how the California Legislature balanced the state budget.

“We’re paying a $5.8 million ransom this year,” Pinkerton told the City Council last week before they authorized the payment to keep the redevelopment agency intact.

The legislature required RDAs up and down California to fork over $1.7 billion collectively if they didn’t want the state to shut them down, seize all of their funds and take over property they own and sell it off. Manteca’s share this year is $5.8 million. In subsequent years the Manteca RDA will pay the state $1.2 million annually in exchange for continuing to be allowed to exist.

That means a number of Manteca property owners who are paying taxes to cover RDA loans that generated funds for the city to invest in infrastructure and economic development instead will be spending the next 20 years paying taxes to retire the loans that will be used by the state to cover just the current fiscal year shortfall for everything from state employees’ salaries to entitlement programs.

The California Supreme Court, though, has agreed to hear a challenge to the constitutionality of the state’s move. The court is expected to make a ruling by the end of December.

Meanwhile, the state is barring all RDAs from entering into new contracts for economic development or to build affordable housing before Jan. 1, 2012.

The council meets again Thursday at 3 p.m. to discuss other RDA-related issues that are the result of agreeing to make the payments to the state.