[UPDATED] State Budget Vetoed, Redevelopment Agencies Still in Play

Gov. Jerry Brown vetoed a budget passed in the state Legislature Wednesday, but the fate of local redevelopment agencies is still unclear. 

Correction: an earlier version of this story stated redevelopment agencies were spared by the veto. Separate bills passed by the Legislature that have not been acted upon by Gov. Brown are still waiting for a response. 

The elimination of redevelopment agencies, which allow local governments to collect money from property taxes for improving blighted areas and subsidizing economic growth, was a centerpiece of Gov. Brown's January budget proposal that met with strong resistance from cities across the state. 

Although Diamond Bar lost its redevelopment agency in 2000 after a court decision threw out the city's redevelopment plan, city officials said elimination of nearby redevelopment agencies could put Diamond Bar on a "level playing field" when attracting businesses to the city.

Mayor Steve Tye said the city lost a computer consulting firm — SIGMAnet — in 2010 after the city of Ontario was able to offer the company a better lease with the help of redevelopment funds.

"When you compete against a community that has [a redevelopment agency], you are at a distinct disadvantage," Tye said.

Currently, Diamond Bar must tap its general fund if it wishes to spend on redevelopment or improvement projects. 

City Manager Jim DeStefano said in March that he felt it is unlikely that redevelopment agencies would be eliminated in the new budget.

"It's hard to believe they would do away with [redevelopment agencies] because there is no economic plan in the state of California," DeStefano said. "And if the state eliminates that tool, then what tool is available to attract businesses and keep them here?"

Spending through redevelopment can also contribute to city projects. In Walnut, , the city used its redevelopment agency to build a new City Hall, its Senior Center, and $3.5 million in improvements to Meadowpass Road.

City News Service contributed to this report.

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