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State is on the hunt for redevelopment money

July 12, 2012 |  7:00 am

Ana

One of the most complicated, important and obscure functions in California's state budget will begin on Thursday, as Gov. Jerry Brown's administration starts tallying up leftover funds from defunct redevelopment agencies.

The agencies are being dissolved this year, and the Brown administration is counting on $3.1 billion in cash and property tax revenue to help close the deficit. The redevelopment money is being routed to local schools and community colleges, which lightens the load on the state budget.

The first of many waves of money is expected to start rolling in over the next few weeks.

It's a controversial issue, and could result in drawn-out political and legal battles over how much redevelopment money cities should be allowed to keep.

The Costa Mesa City Council has scheduled a special meeting on Thursday to vote on whether to hand over $1.4 million. "The city disputes it owes the money," according to a notice on Costa Mesa's website.

Similar disputes are playing out around the state, said Chris McKenzie, executive director for the League of California Cities. He said some local governments may file lawsuits.

“When there are different understandings of the law, you’re going to see things like this happen," he said.

The Brown administration has stood by its plans to ensure schools get the redevelopment money.

"We’re moving forward," said Ana Matosantos, the governor's finance director.

There are also concerns that there won't be enough redevelopment money to plug the state's budget gap. The nonpartisan Legislative Analyst's Office has warned that there may be $900 million less available than the state expects.

RELATED:

Cities to battle California in court for redevelopment money

California cities lose battle with state for property tax funds

Gov. Jerry Brown signs budget that relies on voter-backed tax hikes

-- Chris Megerian in Sacramento

twitter.com/ChrisMegerian

Photo: Gov. Jerry Brown listens as his finance director, Ana Matosantos, discusses the state budget in January. Credit: Rich Pedroncelli / Associated Press

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