LAO Recommends Large-Scale Permanent Hit to Redevelopment

From the League of Calfiornia Cities website:

Less than a week after Gov. Arnold Schwarzenegger released a proposed budget to close the $11.2 billion shortfall for FY 2008-09, the Legislative Analyst's Office (LAO) released an analysis of the Governor's latest proposal. LAO concurs with the Administration's assessment and projects that the budget shortfall over the next 20 months is $27.8 billion. While the Governor did not propose an additional shift of redevelopment funds, the analysis recommends a permanent annual shift of $400 million in redevelopment funds.

LAO's analysis supports the Governor's framework to close the gap with a combination of cuts and tax increases and recommends that the Legislature take quick and aggressive action to solve the problem. LAO further suggests alternative revenue increases and program reductions to ensure minimizing harm to the state's taxpayers and core programs, and raises concerns about future shortfalls.

The analysis also provides some alternatives to the Governor's proposed budget solutions including several that would impact local governments.  For the full anaylsis, click here.