As we recently predicted, the California Redevelopment Association and the League of California Cities yesterday filed a lawsuit in the California Supreme Court over the recent passage of bills to eliminate, or at least “ransom” its more than 400 redevelopment agencies. AB 1X 26 eliminates redevelopment agencies while AB 1X 27 allows agencies to exist if they agree to pay their share of $1.7 billion this year and $400 million annually. 

The central claim in the lawsuit is that AB 1X 26/27 violates Proposition 22, the constitutional amendment passed in 2010 to  “conclusively and completely prohibit State politicians in Sacramento from seizing, diverting, shifting, borrowing, transferring, suspending, or otherwise taking or interfering with” revenue dedicated to local government, including redevelopment agencies.

Under the terms of AB 1X 27, cities with redevelopment agencies intending to make their share of the $1.7 billion payment must notify the state by October 1.  But the lawsuit  requests a stay to prevent the legislation from going into effect until the court rules. So for the third year in a row California’s redevelopment funding will become a decision of the courts. Isn’t this fun?