California’s budget process has devolved into a legal labyrinth

California budgets used to be fairly simple documents, fundamentally allocating whatever financial resources the state might have at the moment among its various well-delineated responsibilities.

No more.

Proposition 13, enacted in 1978, had the indirect effect of centralizing major financial decision-making affecting local governments and schools in the Capitol.

Those decisions were affected by subsequent ballot measures, and volatile revenue swings put the budget in a more or less permanent deficit condition.

Today’s budgets are complex packages not only of appropriations but of legislation to legalize, or so it’s assumed, the political decisions. And that inevitably means that after budgets are passed, budget stakeholders often adjourn to the courts to continue their jousting for many more months.

Tellingly, when the Legislature’s budget analyst, Mac Taylor, weighed in on the state’s budget problems last month, his numbers assumed the state would win all of the current lawsuits.

One of those suits illustrates the financial and legal complexity of contemporary budgets and the legal morass that they spawn.

For several years, Capitol politicians have been trying to tap into the $5 billion that city redevelopment agencies skim off the top of the property tax pool each year to repay their bond debts and otherwise support their operations.

Why? Because under the state constitution, the state must make up nearly 40 percent of that diversion, about $1.7 billion, to schools — a subsidy from all California taxpayers to local redevelopment projects.

Cities jealously guard that money and persuaded voters to pass a 2010 ballot measure (Proposition 22) aimed at protecting it and other local government funds from state raids.

However, Gov. Jerry Brown and legislators decided that Prop. 22 didn’t prohibit them from abolishing redevelopment altogether, and they passed a law to that effect. And then they softened it to say that cities could continue redevelopment if they coughed up $1.7 billion for schools.

The subsequent lawsuit reached the state Supreme Court a few weeks ago, with a decision likely in January, just in time for the next round of budget follies. And it could have a very ironic result.

The comments of justices during oral arguments indicated that they may uphold redevelopment’s abolition as a legitimate exercise of state authority, but invalidate the law allowing cities to pay the continuation fees because that would violate Prop. 22, thus ensnaring them in their own political trap.

Another twist: County governments, which have also complained about state raids, seem to be hoping for that outcome because abolition of city redevelopment agencies would shift more property taxes to counties.

Dan Walters’ Sacramento Bee columns on state politics are syndicated by the Scripps Howard News Service.

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