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8A Page 23 The League will keep city o�cials informed of any additional developments on this important topic. `LawsuiY Continued from Page 1... Though this action now closes the first case, CRA v. Genesf,CRA will have to file a second lawsuit against the state challenging its$2.05 billion redevelopment raid included in the FY 2009- 10 state budget passed in July 2009.CRA contends the second state budget raid is no different than the first raid in 2�08 that was ruled unconstitutional. CRA expects to file this subsequent suit in the next few weeks. °While we're pieased that the state dropped the appeal of its FY 2008-09 raid,we must head right back to court to block an even more drastic raid this year. Not only are these raids iliega(, but they're terrible public policy. Given our shaky economy,you'd expect lawmakers to be doing everything possible to support programs like redevelopment that put people to work and generate tax revenue,"said CRA Executive Director John Shirey. The FY 2009-10 budget passed in September 20Q8 included a provision to take$350 mil(ion in redevelopment funding to use to fund state obligations.This action was a clear violation of Article XVI, Section 16 of the Cafifornia Constitution which states that redevelopment tax inc�ement funds can only be used for specified redevelopment activities,specifically`�o frnance or re�nance ...the redevelopmenf projecf." CRA in December 2008 and in April 2009,Sacramento Superior Court Judge Lloyd Connelly ruled in favor of redevelopment agencies and invalidated the 2008 legislation finding that it "vio/afes the intent of section 16 jof the State ConstitufionJ, to allocate fhe tax rncremenf to fhe financtng of redeve/opment projects."The State of Califomia originally filed papers to appeal the decision but dropped that appeal last week. Despite the clear unconstitutionality and the Superior Cour�ruling,just three months after Judge Connelly's ruling,in July 2009, legislators and the Gov.Amold Schwarzenegger approved budget bill ABX4-26.This bill authorizes a$2.05 billion raid of local redevelopment funds, including$1.7 billion in FY 2009-10 and another$350 million in FY 2010-11. While legislative staff and lawyers tinkered with the wording of the 2009 legislation in an attempt to get around the state Constitution and Superior Court Ruling, the raid in the FY 2009-10 raid is also unconstitutional. It is still an attempt to redirect redevelopment funds to pay off#he State's obligations—clearly a violation of the Constitution. The second lawsuit will be filed shortly, also in Sacramento Superior Court.Because payments from redevelopment agencies are due in May 2010,CRA wil[seek a Superior Court ruling before that time. Although CRA anticipates that the 2009 raids will be found unconstitutional,this irresponsibfe action by legislators and Governor forces redevelopment agencies to set aside funding now and put necessary projects on hold in case the ruling goes against them.That unavoidably delays economic development and job creation,directly harming[ocal communities and stalting economic recovery. `Tax Commiasion'Continued from Page 1... In brief,COTC made the following recommendations: 1. EJiminates the state corporation tax and the franchise minimum tax. 2. Cuts and restructures the personal income tax(PIT)across all income levels, especially upper tiers. a. Moves from six tax rate categories to two. b. Eliminates PIT deductions except for charitable contributions,mortgage interest and property taxes.Categories no longer deductable would include medicines, 3