BURBANK, Calif. -- Pressure is mounting for redevelopment officials in California to advance long-term reforms or risk further state efforts to divert local revenue sources, a lobbyist said last week.
"We have to advance an alternative" that incorporates long-run revisions in redevelopment law, cautioned Kenneth Emanuels, a principal of his own firm and a lobbyist for California cities and redevelopment agencies.
Specifically, Mr. Emanuels observed at a seminar that there will be unabated pressure "to provide increased revenues on a long-term basis to countries and schools."
If the League of California Cities and the California Redevelopment Association cannot develop solutions to this pressure, it is "logical redevelopment will continue to be threatened as a sacrificial lamb," Mr. Emanuels said at a meeting here Thursday sponsored by the redevelopment association.
About 200 redevelopment officials and other interested parties attended the day-long session, which featured a lively discussion in the morning about recent developments tied to the state's efforts to solve its budget problems.
The state's fiscal 1993 budget reduced funding for local government by $1.3 billion. of that total, California saved $205 million by requiring redevelopment agencies to contribute about 16% of their property taxes to countrywide education funds.
The redevelopment transfer applies only to the current fiscal year. But at Thursday's seminar, many redevelopment officials expressed concern that continuing state budget problems could lead to another diversion of local funds.
California localities have led the nation in their use of redevelopment to eliminate blight conditions and revitalize deteriorating areas. The property tax revenues attributed to this process also secure many tax-exempt bond issues.
Mr. Emanuels framed Thursday's debate by observing that redevelopment moneys could be vulnerable to widespread reallocation, given that the Legislature voted this year to categorize schools as a redevelopment purpose.
If that stands as precedent, it will be "easy to use [redevelopment] as a deep pocket for many years to come," Mr. Emanuels said.
Some lawyers on the panel said it appeared the state's budget action unconstitutionally violated local discretion over such funds.
It appears there is "a very good chance of overturning this" in the courts, noted David Beatty, a partner of the law firm of McDonough, Holland & Allen in Sacramento.
However, "we're in a very difficult situation politically," added William Carlson, executive director of the redevelopment association. Redevelopment officials might prevail in court "but what does this do to us in the next legislature session?" he cautioned.
The association will discuss possible legal responses in late October, and that is "one of the key decisions we have yet to make," Mr. Carlson said.
Mr. Beatty said local officials face a dilemma "to allow this to become permanent. "It may make sense in the short term to assist in a state fiscal crisis, he said, but he also warned that redevelopment agencies cannot protest the diversion is illegal and then do nothing.
Murray Kane, a partner in the law firm of Kane, Ballmer & Berkman in Los Angeles, cautioned "we're not going to get anywhere" unless redevelopment agencies also curb real or perceived abuses of state law. For example, Mr. Kane said some agencies have wilfully violated a state law restricting redevelopment on raw land.
In the eyes of state legislators, "this is a damaging area for redevelopment agencies in a very significant way," Mr. Kane said.
James Hankla, city manager of Long Beach, Calif., said the top issue in the next three years is "how revenues are shared among local governments." Without system-wide reform the state's funding structure risks a breakdown, Mr. Hankla said, but other speakers questioned whether state legislators have the ability or willingness to address massive reforms.