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New State Budget Proposal Calls for Elimination of Redevelopment

Restorations of local services outlined in Union City's proposed two-year budget plan, to be voted on tonight, may be delayed.

Gov. Jerry Brown told reporters Monday that he'd reached a deal with Democratic lawmakers and would surge ahead with his new proposed budget plan, with or without Republican support, according to the Los Angeles Times and other media sources.

The move comes just weeks after the governor vetoed a Democratic budget — the first budget veto in California history, the Times notes.

Lawmakers could vote on the new budget as soon as today. If they do, redevelopment — which is responsible for a number of local projects — will be dead. 

Unlike previous iterations, the new budget does not depend on an extension of existing taxes set to expire July 1. As a result, the state tax rate will drop 1 percent, bringing Union City’s tax rate down to 9.25 percent. Instead of tax extensions, the proposed budget assumes an additional $4 billion in revenue, according to the Sacramento Bee.

Should additional revenue fail to materialize, the plan would slash $2.6 billion (roughly equivalent to the entire ) mid-year, with deep cuts to schools and public safety. Austerity measures in that scenario include a shorter school year. 

Like its earlier versions, this budget proposal would eliminate redevelopment agencies across the state, making the agencies null as of July 1, redirecting their revenue to local government and selling off unconstructed land holdings. The move is expected to divert $1.7 billion to schools and local governments, schools and counties, according to a report by the Legislative Analyst's Office.

The Union City Community Redevelopment Agency has already to the City of Union City as a precautionary measure. In March, the city also authorized the agency to issue up to a $40 million bond to ensure that current redevelopment projects, including the , are completed.

The second phase of the BART station renovation is currently underway. Tonight, the agency will award contracts to construct a pedestrian promenade and a plaza near the station, according to Redevelopment Manager Mark Evanoff.

“As long as the resources of the redevelopment agencies are not confiscated, the city can go forward as planned," Evanoff said.

Last week, Union City Mayor Mark Green issued who support the dismantling of redevelopment agencies.

“I am extremely disappointed in the state lawmakers,” Green wrote last Wednesday. “This elimination and hostage-taking of local redevelopment funds puts our city and the entire State of California on the wrong track.”

Green estimates that some 10,200 new jobs could be created through redevelopment projects. The work in the Station District would also generate up to $68 million in state and local revenues, according to Green.

Union City also has a significant amount of blight, which cannot be cleaned up without the redevelopment agency, Green said.

City Council is scheduled to approve tonight.

However, the plan — which calls for restoration of a number of services slashed in recent years, including the addition of a police officer and several city positions — relies on redevelopment remaining intact.

According to City Manager Larry Cheeves, if redevelopment is eliminated, the amount of money the city will lose is comparable to the amount of money it plans to reinstate in the two-year budget. Some of the proposed restorations may be delayed, Cheeves said.

pri's mom June 28, 2011 at 04:40 PM
What has been lost in all news coverage is that with new budget that is set to be signed today is that the two top forms of California govt has essentially thrown judicial branch of state govt under the bus! When courts statewide have to shut down courtrooms that means longer lines, civil and criminal cases taking weeks if not months to be heard. Riverside County has already had to DISMISS criminal cases due to lack of funding which means no sfaff to process paperwork in timely mannerr. SF Courts shut down early due to budget short falls. Nevada county laid off workers the list goes on. Justice in this state is no more. Civil cases, which has statute of limitations will not be heard. Criminal cases will be dismissed if all criminals don't waive the 10 day rule and there are no judges/staff available. We can only pray that JB wakes up and restores trial court funding or justice as we know it will no longer exist.
Carol J. Vernaci June 28, 2011 at 06:56 PM
This may not be the end of redevelopment since the California Redevelopment Agency is planning a law suit against the State of California. In the mean time the question is how much money will be going back into the general fund since it won't be used for the redevelopment project area? Carol Dutra-Vernaci
Zoneil Maharaj June 28, 2011 at 07:17 PM
I'll have to follow up on just how much goes to the city's general fund. Back in January, Redevelopment Manager Mark Evanoff told Patch that the redevelopment agency generates $18 million in tax increment annually. That money would be rerouted locally, but mostly to schools to make up for the drops in funding. The legislation also calls for redevelopment assets to be liquidated, which is why they're transferring property over to the city. I'll update when we get the local figures.

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