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News Release  

May 10, 2010
CONTACT:Barry Foster
Economic Development Director

Moreno Valley Forced to Pay Over $5 Million to Cover State Raid of Local Redevelopment Funds

Today the Moreno Valley Redevelopment Agency was forced to turn over $5,258,237 to the Riverside County Auditor, a required payment resulting from the State’s decision to raid $2.05 billion in local redevelopment funds as part of the 2009-10 State Budget. Instead of going to fund local job creation, economic growth and urban revitalization projects, this money will now be siphoned off to help pay the State’s obligations.

The payment was made in accordance with a ruling by Sacramento Superior Court Judge Lloyd Connelly last week which instructed local redevelopment agencies to abide by the provisions of ABX4-26 passed last year as part of the state budget. The bill allows the state to take $2.05 billion in redevelopment funding to use for state obligations. The California Redevelopment Association (CRA) is appealing the Superior Court ruling to the Court of Appeal.

“This is the worst possible time for the State to be raiding our funds because it is the work of our Redevelopment Agency that helps create jobs in Moreno Valley,” said Mayor Bonnie Flickinger. “The money we are being forced to pay to fund State obligations was going to be used for local revitalization projects that would have improved our community, created jobs and stimulated our local economy.”

California Redevelopment Association Executive Director John Shirey vowed to fight the Superior Court ruling: “We strongly disagree with Judge Connelly’s ruling which effectively says the Legislature has unlimited discretion to redirect local redevelopment funds to any purpose it wishes. Under that logic any state program could be called redevelopment. The Legislature needs to deal with its budget problems by making hard decisions using its own limited resources -- not by taking away local government funds.

“Despite this ruling we continue to believe taking local redevelopment funds and using them to fund State obligations is unconstitutional. We have a strong case and feel confident the lower court ruling will be overturned by the Court of Appeal,” said Shirey