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State Court says California can Eliminate Redevelopment

It may be the end for California’s redevelopment agencies, including the redevelopment agency in Grass Valley.  The state Supreme Court has ruled the Legislature has the power to eliminate the agencies that were created to subsidize construction in rundown areas of a city.  The ruling is a victory for Governor Jerry Brown who wants to use the redevelopment property tax dollars to balance the budget.  Grass Valley City Administrator Dan Holler believes the Dorsey Drive Interchange project which is paid for in part by redevelopment funds is protected under the decision which says projects already under contract to begin can go forward.

“You have to be able to continue the agencies that are identified in what’s entitled enforceable obligations, i.e. you have a contractor or bonds that we have to pay back, so those are all protected as you unwind the activities of the agency, but you couldn’t enter into new projects and new contracts and things of that nature.”

Due to budget shortfalls the state had previously offered cities the opportunity to buy into the redevelopment agency to continue projects but the court found this to be unconstitutional.

“I know that Prop 22 that was passed, basically they said that the state couldn’t take redevelopment dollars. However, redevelopment agencies are a creation of the state. Therefore the state can create it or eliminate it.”

The state will be saving more than a one billion dollars in this year’s budget be eliminating about 400 redevelopment agencies in Nevada County that includes the ones in Grass Valley and Truckee.  The state is heading into the New Year with a projected 13 billion dollar budget shortfall.

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