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Murrieta To Pay State $2.5m From Redevelopment Funds

Murrieta City Council members voted unanimously to approve a $2.5-million payment to California to satisfy a newly-passed law requiring redevelopment agencies to give a large chunk of their funding back to the state.

The Murrieta Redevelopment Agency is preparing to cough up more than $2.5 million in tax dollars this year to the state to comply with a new California law that strips revenue from the agency.

The Murrieta City Council unanimously passed an ordinance Tuesday night authorizing the mandatory payments, which are projected to total nearly $600,000 next year. Future payments of an unknown size were also approved.

Temecula will be forced to pay $4.7 million under the same law, and agencies operating in unincorporated Riverside County owe more than $31 million.

The council ordinance reserves Murrieta's right to sue the state over the new remittance law--fostered under Assembly Bill 1x26 and 27--which city officials and staff have said violate the state constitution. The California Redevelopment Association and League of California cities, two organizations Murrieta is affiliated with, have filed a lawsuit challenging the law.

Mayor Pro Tem Doug McAllister described the payment as a "ransom" no less than three times throughout the meeting.

"The reality of this is since the city is liable for this, not the redevelopment agency, if the redevelopment agency doesn't pay this ransom then the city is on the hook for it," McAllister said.

The redevelopment agency pumps money into infrastructure projects like new bridges and road improvements to entice businesses to set up shop locally and create new jobs. Reconstruction of the Clinton Keith Road bridge over Interstate 215 was partially paid for by the agency. The ongoing work on the California Oaks Road/Interstate 15 interchange is also benefiting from redevelopment funds.

Murrieta Redevelopment Agency Director Mary Lanier said at least 200 jobs were created by those two projects.

The cut to agency funding, while grave, isn't expected to impact ongoing projects, Lanier said. But future projects could be affected by the drop in funding.

When the agency was set up in 1999, a snapshot was taken of the property taxes currently being paid by local businesses and homeowners in Murrieta. As redevelopment projects spurred new construction and created jobs, more property tax revenue was created. That additional money was used, in part, to fund the agency.

Catastrophic budget deficits and a protracted budget battle in Sacramento led legislators to pass a bill that requires redevelopment agencies to pay a portion of their revenues back to the state or face closure.

City officials questioned the wisdom of taking tax money garnered through new construction and job creation from the very agency that likely created those conditions.

"Redevelopment is simply a tool. And how well a tool is used depends on the skill of the folks using it," Councilman Rick Gibbs said. "We've used the tool well. ... We've used it primarily for infrastructure that helped create opportunities for growth in any given area."

"(Sacramento) came up with a scheme that is nothing less than extortion."

mindybell August 03, 2011 at 05:05 AM
Unemployment numbers are comprised of those that are in the job market for the past 30 days. It does not include those that have not been in the job market in the last 30 days: people who have given up looking; those that have gone off unemployment because it has run out. One solution to unemployment is "High Speed University" check it out
Popeye August 03, 2011 at 12:21 PM
Redevelopment Agency's are another form of government corruption. Close then down.
AFR August 03, 2011 at 07:31 PM
"When the agency was set up in 1999, a snapshot was taken of the property taxes currently being paid by local businesses and homeowners in Murrieta. As redevelopment projects spurred new construction and created jobs, more property tax revenue was created. That additional money was used, in part, to fund the agency." In part??? Really??? "In part", is a very casual way of saying that our City Departments that are separate from, "The City's General Fund", (IE: LIBRARY, FIRE DEPT. & CSD), are being robbed their only source of revenue, by the redevelopment agency of valuable property tax money. Well, our CSD (Community Services Department), gets over a million $ a year, funded by our City's general fund. But that's only because Jim Holston, who is our Assistant City Manager, is also our Community Services Director. Wow! How convenient! So with the increased property taxes that is "created" by the redevelopment agency, the redevelopment agency land and zoning is growing and growing and gaining all the property tax which is the only revenue for our City's "other" departments that don't get funded from our City's general fund and budget. So our "other" departments will shrink and disappear, because of being robbed by our redevelopment agencies. The redevelopment agencies are now being robbed by our State. It only makes sense. Rob Peter to Pay Paul. It's like drug dealers robbing from one another. Who gives a damn...

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