The League of California Cities described the Sacramento Superior Court ruling upholding the FY 2009-10 state budget bill redirecting $2.05 billion in local redevelopment funds to help fill the state’s budget deficit as an elaborate court-sanctioned shell game with public funds.

This decision will have devastating implications for the job creation programs of local redevelopment agencies, which in turn would help revive the state’s weakened economy and generate needed state and local tax revenue.

The ruling came in response to a lawsuit filed by the California Redevelopment Association (CRA) in Sacramento Superior Court challenging the constitutionality of the provisions of state budget trailer bill ABX4-26 which passed in July 2009 as part of the state budget.

The CRA board of directors unanimously voted yesterday to appeal Judge Connelly’s decision and authorized CRA to pursue a temporary stay from the Court of Appeal so that redevelopment agencies do not have to make the first payment on May 10, 2010, while the appeal is being considered. The League of California Cities will file a friend of the court brief in support of CRA’s appeal.

League of California Cities Executive Director Chris McKenzie reacted to the Court’s decision by comparing it to an elaborate shell game with public funds:

“The Court upheld a scheme yesterday that lets Sacramento politicians steal local redevelopment funds for any purpose they can cook up and call it a ‘redevelopment’ purpose. Today the politicians are raiding redevelopment funds to offset what the state owes schools without actually benefitting the schools. Tomorrow, if this court decision is upheld, they will steal local funds to finance virtually any program so they don’t have to honestly balance the state budget. The possibilities are virtually endless. This type of state budget gimmickry only deepens the public’s cynical view of state officials and destroys local efforts to create jobs and stimulate California’s weakened economy.”

Visit for more information about the ballot measure campaign to stop state raids of local funds.

Established in 1898, the League of California Cities is a nonprofit statewide association that advocates for cities with the state and federal governments and provides education and training services to elected and appointed city officials.