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State faces new legal threat to budget

September 26, 2012 |  7:00 am

California cities are suing Gov. Jerry Brown's administration over its tough tactics to secure money from defunct redevelopment agencies, a key part of the state budget.

In its lawsuit, the League of California Cities targets legislation that penalizes local governments when they don't turn over redevelopment money. Chris McKenzie, the league's executive director, said the law was unconstitutional because it allowed the state to garnish local tax revenue. 

California is dissolving redevelopment agencies this year, and Brown has counted on $3.1 billion to help plug the state budget hole. Much of the money goes to schools, reducing the state's spending obligations. 

McKenzie said the state has made serious errors when calculating how much money cities need to turn over.

"They’re trying to penalize cities for mistakes made by the Department of Finance," he said. "They have not fully fixed those problems."

H.D. Palmer, a spokesman for Brown's Department of Finance, defended the state's tactics.

"We’re confident that we will be able to successfully defend this legislation," he said. 



State is on the hunt for redevelopment money

Cities refuse to hand over redevelopment money

Disputes over redevelopment money could entangle state budget

-- Chris Megerian in Sacramento