Law Office Management
May 15, 2012
Worry Grows Over Municipal Debts
Dissolution of redevelopment agencies could force cities and counties to default on bond payments.
Municipal finance officers are growing concerned that ambiguity in the state law that dissolved California?s 425 redevelopment agencies could force cities and counties to default on bond payments that are coming due this year, reports the Daily Journal.
Under the state law upheld by the California Supreme Court last year, some $5 million in property tax revenue once held by redevelopment agencies now flows to county auditors to disburse. But redevelopment bond debts totaling roughly $30 billion stayed with the cities or counties as ?successor agencies.? State legislators are trying to clean up the ambiguity in the law to make sure municipalities can service their debts.
Rene Cira Cruz
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