Budget Catch-22: Redevelopment or Schools?

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In an attempt to close an 18 billion dollar budget deficit, Governor Arnold Schwarzenegger and lawmakers last year decided to shift funds away from redevelopment agencies in order to pay for schools. This week, a California judge upheld that decision.

The California Redevelopment Association had filed the legal objection to the using redevelopment funds for education, arguing that redevelopment funds could only be used for redevelopment projects aimed to removing blight.  The funds were supposed to go from everything from infrastructure improvements to affordable housing projects. 

Sacramento Superior Court Judge Lloyd Connelly ruled Tuedsay that the state was within its rights to shift the funds, saying that giving the money to schools is a valid use of redevelopment funds. 

John Shirey, Executive Director of the California Redevelopment Association, says by that standard, pretty much any state program could be called redevelopment.  His association will appeal the ruling, moving to stop the $1.7 billion payment, which is due on May 10.

It's a Catch 22: If the judge's ruling stands, the funds used to improve mostly blighted communities will have to wait. But the kids in California's public schools will benefit by getting the much needed support and supplies that are so scarce in the current economic climate.

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