$3 Million Hit to La Habra from New State Budget

La Habra will have $3 million taken back by the California budget.  over $1 million will be taken from the Highway Use Tax Account. The La Habra Redevelopment Agency will lose $600,000.  $1.3 million in property tax revenue will be taken by the state.  $3 million is about 8% of La Habra's general fund.  

For FY 09-10, the budget for the Redevelopment Agency was $5.8 million. The $600,000 hit is over 10% of the agency's budget.  La Habra Redevelopment Agency owes the City over $8 million for a bond refinancing that the City undertook on behalf of the Redevelopment Agency (RDA).  In FY 08-09, the RDA paid the City $650,000 to continued repayment of the debt.  In FY 09-10, the repayment amount was cut to $200,000. The $600,000 forced budget reduction will hamper efforts of the RDA to finance new redevelopment projects in  La Habra.

Property tax revenues were projected to be flat in the adopted FY 09-10 budget. Giving $1.3 million in property tax money back to the state is about 10% of the approximately $13 million La Habra was expected to receive this year.

The League of California Cities and the California Redevelopment Association contend that state proposals are illegal under the California Constitution and existing State law. The groups are currently exploring options for having the proposed budget amended to remove the taking of money from cities.