Sacramento, CA -- California's redevelopment agencies are on the way out, though their supporters vow to fight to keep them.  

The California Supreme Court Thursday upheld a law that will eliminate 400 local agencies, which the nonpartisan Legislative Analyst's office says will free up two-billion dollars for schools, courts and other public services.  A study by state controller John Chiang, which examined 14 redevelopment agencies across California, found they had collectively denied public schools 40-million dollars that was rightfully school money.  Critics said the agencies did not always spend money on blighted areas and used tricky accounting methods.

According to KSBY, the court's decision has an impact on the Central Coast because redevelopment agencies fund many local projects. For example, the chairman of the redevelopment agency in Atascadero says projects like the Galaxy Square, and projects that had been the works, or were being talked about, will have to be scrapped. "We are out of business, and we are putting the breaks on the things that we have going," says Roberta Fonzi.  

Fonzi says the redevelopment agency had plans for a number of projects in the City of Atascadero. They included a pedestrian bridge, restaurants and road improvements.

The state is counting on $1.7 billion from eliminating four hundred redevelopment agencies in this year's budget.

Governor Jerry Brown released a statement about the state Supreme Court's ruling. "Today's ruling by the California Supreme Court validates a key component of the state budget and guarantees more than a billion dollars of ongoing funding for schools and public safety."