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The California Supreme Court agreed Thursday to review the state's redevelopment overhaul and delayed most provisions until it can decide the matter.

Cities and redevelopment agencies sued the state to block a June budget plan that eliminated about 400 agencies but allowed them to reopen if they contribute funds to schools, relieving the state of $1.7 billion in education costs.

Gov. Jerry Brown wanted to eliminate redevelopment agencies altogether in his January proposal, but he and state lawmakers ultimately agreed on the two-bill package (Assembly Bill X1 26 and AB X1 27) that gives them an option to pay and survive. Cities challenged the plan as unconstitutional, citing voter-approved laws that prohibit the state from taking money from local governments.

The court put the case on a fast track Thursday, asking for legal briefs starting in September and promising to decide the matter by Jan. 15, 2012. Five of the six sitting supreme court justices agreed to temporarily block most of the plan until the case is resolved, allowing redevelopment agencies to remain open. The agencies cannot, however, incur new debt, purchase property or enter into new contracts during that time.


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