In a devastating blow to Oakland, the California Supreme Court issued a ruling today that upholds the state's ability to seize local redevelopment agencies.

If the city's redevelopment agency is wiped out, Oakland could see the elimination of 171 full-time city staff, including 17 police officers and other key staff. In addition, city officials estimates the loss will include 7,600 jobs in Oakland, experts say.

The ruling also struck down the state's plan to use future funds from redevelopment agencies to provide additional funds state education. Oakland would have been on the hook to pay $40 million in the first year and $24 million per year thereafter, if it wanted to keep its redevelopment agency.

In late June, Gov. Jerry Brown signed state legislation that essentially abolished municipal redevelopment agencies in California. The state planned to use the money - $1.7 billion the first year and $400 million annually after that - to pay for education and other programs.

In response, local redevelopment agencies, including Oakland, joined in a lawsuit, arguing that the state's actions violates the terms of voter-approved Proposition 22, a measure designed to bar the state from seizing local funding, including redevelopment money to pay its bills.

In Thursday's ruling, the court upheld Prop. 22 and said the state can't involuntarily take funds from the agencies. But, the court also said that the state of California has the right to eliminate local redevelopment agencies.

Oakland Mayor Jean Quan said she's disappointed in the ruling. She said she hopes that the state legislature can work with local redevelopment agencies to create a plan that would allow the agencies to exist and to "voluntarily" pay additional funds into state education.

"Most of us could live with some version of that - keep the agency and contribute more money towards the schools," she said. "We're hopeful that in January (state lawmakers) will move quickly to do a legislative fix."

Oakland's redevelopment money is heavily interwoven into the salaries and programs of many city services - it even pays a portion of the mayor's salary.

Along with the hundreds of jobs that could be eliminated, several high profile development projects could be scaled down or scuttled. City officials said redevelopment of the Oakland Army Base, the Broadway Auto Row project and the funds to build a new stadium for the A's could be substantially reduced or eliminated.

Affordable housing could also take a big hit in Oakland. Officials said that about 25 percent of redevelopment funds are used for affordable housing.

Brown said in a short statement that, “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.” There are 390 local redevelopment agencies in California.

What comes next is a bit unclear. The city earlier this year tried to protect its current redevelopment funds and projects. In March, the Oakland City Council voted to fast track funds already in the pipeline for some redevelopment projects and to sell some city properties to its redevelopment agency as a way of guarding against the possibility of the state taking control of  the properties if redevelopment is eliminated. Projects that are a part of the transfer include the Oakland Army Base and the headquarters for the Oakland Police Department.