The budget gives redevelopment agencies a stiff one-two punch.  It eliminates them, then sets up an alternate program for agencies that agree to give the state money.  That's flat-out illegal, says Chris McKenzie with the League of California Cities.  He says the governor and legislature completely ignored the will of the voters, who passed Proposition 22 last fall.

McKenzie: "Sixty percent said, thou shall not do this - even in times of fiscal hardship, these funds can't be taken from local governments.  And lo and behold, that's what they did."

But H.D. Palmer with the governor's Finance Department says Prop 22 doesn't address the agencies' actual existence.

Palmer: "Redevelopment agencies were created by an act of the legislature. And similarly, they can be dissolved by an act of the legislature. And that is what the legislature voted to do."

Redevelopment supporters are asking the State Supreme Court to immediately decide who's right.