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Budget Bills Impact On Line Merchants, Redevelopment Agencies

Posted on Thursday, June 30, 2011 10:37am

Bit by bit, California’s new spending plan is becoming law. Governor Jerry Brown signed several pieces of the budget package Wednesday–including two redevelopment bills that sparked intense lobbying. Now, cities and redevelopment agencies are vowing to sue.

The governor also signed a piece of the budget package that requires online retailers like Amazon and Overstock to collect sales tax the way brick-and-mortar retailers do. Brown will likely sign the rest of the budget by Thursday.

One measure eliminates the state’s more than 400 redevelopment agencies. The other sets up an alternate program for agencies that agree to give the state money. Too much money, says John Shirey with the California Redevelopment Association. He says unless a court strikes the laws down, many agencies will go out of business – and the ones that survive will barely have any money left.

“They will have to stop activity now,” said Shirey. “They will have to prepare to make payments just in case it doesn’t work out in court. So what that means is, projects aren’t funded, work comes to a halt and we’re gonna see further harm to the California economy.”

Actually, redevelopment projects already under way will continue. But most new ones are in trouble.

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