SACRAMENTO (CBS/AP) – The California Supreme Court said Thursday that Gov. Jerry Brown and state lawmakers have the authority to eliminate community redevelopment agencies but not force them to redirect their taxes to local services.

The state’s high court released a decision Thursday that will likely send both sides back to negotiations. The state is counting on $1.7 billion from eliminating about 400 redevelopment agencies in this year’s budget.

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The justices said the state Legislature has the power to eliminate them, but the state was not allowed to impose new funding requirements.

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The court split the decision by affirming the state’s right to eliminate redevelopment agencies but upholding Proposition 22, which banned the state from raiding local government funding, saying the state could not force payments from agencies as a way for them to remain in business.

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