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Calif. redevelopment agencies shut; funds go to help state budget

February 1, 2012 12:00:00 AM PST
Hundreds of redevelopment agencies are being shut down in California on Wednesday.

Money that had been used to fund the 400 agencies will be shifted to the general budget. It's all part of Gov. Jerry Brown's plan to close the state's budget gap.

Lawmakers decided to eliminate the agencies last year. The state Supreme Court upheld the decision, saying the legislature had the authority to end the agencies.

The agencies have been around for awhile. Originally, the goal was to build projects such as low-income housing, but that role changed over the years.

Lawmakers said a lot of the agencies were just providing a form of corporate welfare, building projects such as shopping malls and sports arenas.

"The $6 billion a year which they were siphoning away, especially from the school districts, is no longer sustainable," said Assemblyman Chris Norby (R-Fullerton). "The state's broke and we can no longer afford this kind of expensive corporate welfare that redevelopment has become."

About 3,000 government workers will be impacted by the closures.

Some people argue that the agencies played an important role in bringing jobs to local communities.

"The needs for in-fill and transit-oriented development, affordable housing, infrastructure, jobs is as acute today as it has ever been," said Jim Kennedy, interim executive director of the California Redevelopment Association.

The money that the redevelopment agencies were using will go to the state, and some of it will be diverted to local school districts.