Redevelopment in California: Its Abrupt Termination and a Texas-Inspired Proposal for a Fresh Start
USC Law and Economics Research Papers Series No. C12-7
USC Legal Studies Research Papers Series No. 12-11
37 Pages Posted: 2 Jun 2012 Last revised: 12 Nov 2013
Date Written: June 1, 2012
This paper describes how redevelopment in California came to an end with the California Supreme Court’s decision in California Redevelopment Association v. Matosantos and how redevelopment could be resuscitated. The first part of the paper highlights the precipitating events leading up to the case: California’s unique property tax history, the successes and drawbacks of redevelopment, how redevelopment is financed, and the text and politics of Proposition 22, the state constitutional predicate for the Court’s opinion. The second section describes the arguments and outcome of the case in which the Court upheld a statute dissolving redevelopment agencies (RDAs) and simultaneously struck down a companion bill — a “pay-to-stay” law — that would have enabled cities and counties to preserve their RDAs by pledging local funds to the state. A concluding section proposes that California legislators consider a new redevelopment enabling law, modeled along the lines of Texas’s tax increment reinvestment zones (TIRZs). Such a statute would conform to the guidelines for constitutionality from the concluding paragraph of the Court’s opinion in Matosantos, and it would be fiscally responsible because it limits the use of tax increment financing.
Keywords: California, redevelopment agencies, RDA, Matosantos, tax increment financing, TIF, Proposition 22, Texas
Suggested Citation: Suggested Citation