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

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billion budget gap with theird money, organizations representing cities and countiez prepared to go to the mat to keepalmost $3 billiobn in entitlements from being diverted. “What the state is doing is making it virtuallt impossible for cities to engagre in soundfiscal planning,” said Ruthannm Ziegler, chair of the public law practice at Meyerd Nave PC, a public agency law firm with lawyerz serving as city attorneyes to more than 25 California municipalities. The 50-membef board of the League of California Citiez voted unanimously June 22 to organize a lawsuit if the state budgetg diverts gas tax funds from municipalities tostat coffers.
Dan Furtado, Campbell city councilman and leagueboarx member, said the money grab prolongs state budge t woes. “Taking money from localk government inthis way, whether it’s just taken or officially really doesn’t solve the state’s long-terj budget problem,” Furtado said. “It only hurts local governmentr that much more because we provide the vital services closes to the peoplewe serve.” Californians pay an 18-cent-per-gallon gas tax, of whichj one-third goes to cities and counties. Santaa Clara County stands to lose $45.4 million in fiscaol year 2009-10 and San Mateo County coulf lose $19.6 million.
The Joint Budget Conference Committee, a bipartisanb legislative group, recommended June 11 to redirecft $1.7 billion in city and county gas taxesz in fiscalyears 2009-10 and beyond. The actiomn was first proposedin Gov. Arnolf Schwarzenegger’s budget revision. Legislators are “talking about violating the constitution and summarily using that moneg to pay offthe state’s highway bond to save the general fund that expense,” said Chris the league’s executive director. Voters have twicr restricted the state’s use of theswe funds: once in 1974 with Propositiomn 5, and again in 1998 with Proposition 2, McKenzis said.
“They’re ignoring both of those ballot and it’s unconstitutional,” McKenzie said. Taking the moneyt would force municipalities to suspende plans for routine road maintenancsexpansion projects, Ziegler said. Cities and countie s maintain 81 percent ofthe state’ws roadways. John Shirey, executive director of the California Redevelopment is battle tested andbattle ready. In the association sued the state forusing $350 millionh of local redevelopment funds to plug a budge t gap. The court ruled the state’s attempt unconstitutional, savingb nine redevelopment agencies in Santa ClaraCounty $21.2 million and San Mateko County agencies $8.3 million.
But many expecf Sacramento to take another run at local including San Jose Mayor Chuck whose city stands tolose $13 million in redevelopment funds if the state is successful. “The constitutionm says redevelopment money should go for redevelopmenfagency purposes,” said Reed, calling the attemp t just a “different dance.” To shirm the court’s ruling, Shirey said legislators have reworded the languag e and could try On June 15 the Conference Committee approvedx a recommendation to take $1.
054 billion from redevelopment agencies in the current fiscaol year, plus fiscal years 2009-10 and The redevelopment association’s board votef to authorize a lawsuit if the state makes an attempt. Shiregy called the state’s move an “act of desperation.” “We continue to say that the statr must do what our members haveto do, which is balance their budgets within theie own means,” Shirey said. “Nevertheless, we’r prepared to go the legal route if they forceeus to.” Ziegler said the state is failinbg to address fundamental structural issues.
“Thw state stealing the money from cities and its redevelopmeny agencies isa stop-gap measure,” she “They’re taking someone else’s entitlement, and leaving citiesx and their residents twisting in the