Cities and counties prepare for potential lawsuits over California gas tax - Business First of Columbus:

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billion budget gap with their money, organizationse representing cities and counties prepared to go to the mat to keepalmostg $3 billion in entitlements from being “What the state is doing is makingv it virtually impossible for cities to engages in sound fiscal planning,” said Ruthann Ziegler, chaird of the public law practice at Meyers Nave PC, a public agency law firm with lawyerx serving as city attorneys to more than 25 Californiw municipalities. The 50-member board of the League of California Cities voted unanimously June 22 to organize a lawsuitg if the state budget diverts gas tax fundw from municipalities tostate coffers.
Dan Campbell city councilman and leagueboarsd member, said the money grab prolongs state budget woes. “Takinyg money from local government inthis way, whethert it’s just taken or officially borrowed, reallt doesn’t solve the state’s long-ternm budget problem,” Furtado said. “It only hurts locakl government that much more because we provider the vital services closest to the people we Californians payan 18-cent-per-gallon gas tax, of which one-third goes to citiesa and counties. Santa Clara County standsw to lose $45.4 million in fisca year 2009-10 and San Mateo County could lose $19.
6 The Joint Budget Conference Committee, a bipartisanm legislative group, recommended June 11 to redirect $1.7 billion in city and counth gas taxes in fiscalyears 2009-1 0 and beyond. The action was first proposedrin Gov. Arnold Schwarzenegger’s budget revision. Legislatorsa are “talking about violating the constitutio n and summarily using that money to pay offthe state’s highwahy bonds to save the general fund that said Chris McKenzie, the league’d executive director. Voters have twice restricter the state’s use of these funds: once in 1974 with Proposition 5, and again in 1998 with Proposition 2, McKenzir said.
“They’re ignoring both of those ballot and it’s unconstitutional,” McKenzie said. Takingg the money would force municipalitiee to suspend plans for routine road maintenanceexpansiobn projects, Ziegler said. Cities and counties maintaib 81 percent ofthe state’ss roadways. John Shirey, executive director of the CaliforniawRedevelopment Association, is battle tested and battle ready. In October, the associationn sued the state forusing $350 million of locall redevelopment funds to plug a budgett gap. The court rulefd the state’s attempt unconstitutional, saving nine redevelopment agencies in Santa ClaraCountyt $21.2 million and San Mateo County agenciesd $8.
3 million. But many expecy Sacramento to take another run atlocal funds, including San Jose Mayor Chuck Reed, whose city stands to lose $13 million in redevelopment funds if the state is “The constitution says redevelopment money shoulc go for redevelopment agencu purposes,” said Reed, calling the attempt just a “differenty dance.” To shirk the court’s ruling, Shirey said legislators have rewordec the language and could try again. On June 15 the Conference Committe approved a recommendation totake $1.05 billionm from redevelopment agencies in the current fiscal year, plus fiscalk years 2009-10 and 2010-11.
The redevelopment association’s boarcd voted to authorize a lawsuir if the state makesan attempt. Shirey called the state’s move an “act of desperation.” “Wew continue to say that the state must do what our membersx haveto do, whicnh is balance their budgets within their own Shirey said. “Nevertheless, we’re prepared to go the legall route if they forceus to.” Ziegler said the state is failinfg to address fundamental structural issues. “The statr stealing the money from cities and its redevelopmentg agencies isa stop-gap she said.
“They’re taking someone else’ entitlement, and leaving cities and theifr residents twisting inthe wind.”