Eminent Domain Report

It should come as no surprise that the budget proposal issued by Governor Brown today contains some painful cuts.  California remains in the midst of one of the worst economic cycles in history, and its budget shortfall has reached historic proportions.  According to the Governor, as he takes office, California's budget shortfall totals $25 billion - yes, that's Billion, with a "B." 

For me, I am particularly disturbed by proposed cuts to education; the UC system, which provided me with both my undergraduate and law degrees, may face numerous cuts, including a general, as-yet-to-be-determined expenditure reduction of $500 million.  (According to a letter from UC Regents President Mark Yudof, the proposal would mean that "the collective tuition payments made by University of California students for the first time in history would exceed what the state contributes to the system's general fund.")

But in my professional capacity, the most notable impact is almost certainly the proposal related to redevelopment and, more specifically, redevelopment agencies.  The Governor's proposed budget would effectively eliminate redevelopment agencies in California.  The plan includes:

• "prohibit[ing] existing [redevelopment] agencies from creating new contracts or obligations effective upon enactment of urgency legislation;
• "disestablishing" redevelopment agencies, effective July 1;
• using huge portions of the agencies' existing revenue streams over the next few years to help pay off existing debts; and
• creating successor agencies to manage existing debt service, which is expected to take 20 years.

The bottom line: "After 2011-12, the money available after payment of RDA debt would be distributed to schools, counties, cities, and non-enterprise special districts for general uses."

Not hard to imagine that this will be one of the hotly contested issues in the Governor's proposal.  We'll let you know what happens as the story develops.