State, Cities in Next Round of Redevelopment Fight

With the hearing done for the League of California Cities’ lawsuit against the State, the battle for redevelopment dollars is far from over. While the League’s suit was the largest, it is just one of the 70 cases filed by cities against the State.

The case challenges the State’s threat to withhold property and sales tax revenues from non-compliant cities. The so-called “claw-back” would deprive cities with their main sources of revenues, and in some cases could cripple governments. San Jose, for instance, was found to have inappropriately withheld $148 million from the State, Fresno withheld $41.5 million too much.

According to the State, withholding funds from tax revenues is a last resort. However, the reaching this “last-resort” could also arise from the state failing to create a series of administrative processes to resolve disputes. Those who have gone through the “meet-and-confer” process have largely ridiculed it as the state simply going through the motions.