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9 1 4-24(l <br />RDAfrom page 1 .................................................. <br />The Governor's proposal to shift $250 million <br />in redevelopment revenues to ERAF in 2003 -04, <br />and growing by $50 million a year for the subse- <br />quent 14 years, would eliminate 50% or more of <br />an RDA's revenue stream. It's expected that the <br />implementation would include a provision requiring <br />sponsoring cities to "backfill" the RDA fund shift if <br />the RDA cannot meet it's obligations. This is a <br />direct impact to cities general funds. <br />For a more detailed summary of the CRA <br />survey, you'll find the document "Impacts of <br />Governor's Proposed Redevelopment Shift to <br />Cities" at www.cacities.ora /budaet under the Key <br />Resources section. <br />For further questions, please contact Jean <br />Korinke, 9161658 -8245, jkorinke @cacities.org. <br />The Senate Budget Subcommittee #4 (which <br />deals with local government issues) has accepted <br />the $250 million shift for 2003 -04, but rejected the <br />ongoing shifts for the out -year budgets. In addi- <br />tion, they rejected the governor's allocation pro- <br />posal, and instead adopted an allocation based on <br />the 2002 -03 allocation formulas. The Assembly <br />Subcommittee removed the redevelopment issue <br />from its hearing Thursday, leaving both houses <br />with different versions of the proposal at this time. <br />The California Redevelopment Agency (CRA) <br />undertook a survey of its' member agencies to <br />understand the true impact of the proposed cuts <br />(based upon the formula for the 2002 -03 RDA <br />ERAF shift). Here are some of the highlights: <br />• 22% of all redevelopment agencies will be <br />unable to meet the ERAF shift obligation in 2003- <br />04 after exhausting available revenues and re- <br />serves — forcing cities to consider cutting ser- <br />vices. <br />• 66% of all redevelopment agencies will be <br />forced to tap into their one -time program funds in <br />2002 -03 to cover the state's obligation. <br />• By 2004 -05, 36% of all sponsoring cities <br />will be forced to "backfill" RDA's for the ERAF <br />shift. <br />And the numbers grow exponentially from <br />there. <br />LAO from page 1 .................. <br />The LAO confirms that if all of the proposals <br />were adopted as is, the May revise would provide <br />a balanced budget for fiscal years 2003 -04. And, <br />while the plan reduces the structural deficit (from <br />$18 billion in January), it still leaves the state <br />starting fiscal year 2004 -05 with an ongoing <br />structural deficit in the range of $7 billion. <br />If the Governor's multiyear approach is <br />adopted the LAO report urges the legislature to <br />include additional ongoing solutions beyond those <br />Proposed in the May revision. <br />To review a full version of the LAO report, go <br />to: www.cacities.org /budget. <br />Our Mission <br />We urge cities to "get to know" their RDA <br />numbers, understand how and when the city <br />general fund will be impacted, translate this into <br />impacts on local services, and let your legislators <br />know the stories. <br />Restore and protect local control for cities through <br />education and advocacy to enhance the quality of life for all <br />Californians. <br />PAGE 6 /PRIORITY FOCUS Visit the League's Official Web Site -- www.cacities.org <br />