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California budget stumbles as redevelopment funds prove scarce

September 28, 2012 |  4:52 pm

Ana

The state is saving far less money from the dissolution of redevelopment agencies than it expected, according to figures released Friday afternoon by Gov. Jerry Brown's administration.

The first wave of pavements produced just $238.7 million in savings, a little more than one-third of the $685-million goal. Administration officials said the numbers aren't final and they pledged to scrub the books to make sure no money was going uncounted.

However, Friday’s disclosure is a bad omen for one of the more controversial pieces of this year's state budget. The nonpartisan Legislative Analyst's Office has consistently warned there would be much less money available from defunct redevelopment agencies than the Brown administration has counted on. In addition, the state's threat to penalize cities that don't turn over funding has led to a lawsuit and fierce criticism from local government officials.

The process of unraveling redevelopment agencies is one of the most critical and complicated parts of the state budget. As the agencies are dissolved, leftover assets and property tax revenue are being shifted to cities, counties, special districts and schools. Brown has said that money will reduce the state's own funding obligations by $3.1 billion in the current fiscal year.

Right now savings have reached a total of $371.7 million.

H.D. Palmer, a spokesman for Brown's Department of Finance, said the state based its estimates on numbers from county officials. But so far, those haven't panned out. For example, the state expected to save $30 million with redevelopment money from Riverside County, but none materialized.

Administration officials could not explain the discrepancy but said they will examine the situation. There are still several rounds of payments left to go, and Palmer said the state may be able to make up for lost ground during the year.

State faces new legal threat to budget

State is on the hunt for redevelopment money

Cities refuse to hand over redevelopment money

-- 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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