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Redevelopment money is a sticking point in budget talks

June 14, 2012 |  2:47 pm

Gov. Jerry Brown, center, with Assembly Speaker John Pérez, left, and Senate President Pro Tem Darrell Steinberg

Gov. Jerry Brown and Democratic lawmakers are at odds over a small but crucial part of the state budget -- what happens to $250 million that once funded now-defunct redevelopment agencies.

Democrats in the Legislature want to use the money for schools, which would free up other funds for social services. Lawmakers have been scraping for every dollar they can find to help prevent the steeper cuts to welfare, child care and college scholarships that Brown proposed earlier this year.

But Brown administration officials say the money is supposed to go to county governments, siding with the California State Assn. of Counties.

In a letter dated Wednesday, the association said that "California's counties do not have the capacity to absorb the loss of these funds without severe adverse reactions."

The disagreement is the result of different legal interpretations on what to do with property tax revenue that previously went to redevelopment agencies, which are being dissolved this year.

The issue was raised again during a Senate budget committee hearing on Thursday. Michael Cohen, chief deputy director at Brown's Department of Finance, said the administration was “absolutely opposed” to sending the money to schools instead of counties.

Cohen questioned whether “pulling millions of dollars that they’ve relied on is appropriate or necessary.”

It's unclear if the disagreement will lead to an impasse. Senate Budget Chairman Mark Leno (D-San Francisco) said negotiations are ongoing and they're exploring other sources of funding.


Gov. Brown demands legislators make deeper budget cuts

Democratic lawmakers counter Brown with new budget plan

Jerry Brown's history of rifts with state lawmakers over welfare

-- Chris Megerian in Sacramento


Photo: Gov. Jerry Brown, center, at a news conference with Assembly Speaker John Pérez, left, and Senate President Pro Tem Darrell Steinberg, right, last year. Credit: Hector Amezcua / Associated Press