Cities Mull Over State’s Take-Aways : Finances: Raid on municipal revenues isn’t as hurtful as feared, but there is still a lot of pain.

A day after Gov. Pete Wilson signed a state budget that puts the squeeze on cities, Downey Finance Director Lowell Williams sat mulling over a list of 60 items, trying to figure out what had to go:

New equipment. A vacant position. Travel. Public library hours. Future hiring.

The state wants $650,000 from Downey’s $35-million budget--a payment the city can ill afford to make, Williams said, but not as much as city officials had feared.

Throughout Southeast L.A. County last week, city leaders reacted to the budget news like patients who had just heard that only one leg had to be amputated.

“This is not something that we are going to jump for joy about or throw a ticker-tape parade, but it’s not as bad as we thought,” Lakewood Mayor Marc Titel said.

City officials will have to hand over to the state 9% of their property taxes and about 16% of redevelopment agency funds as well as cigarette taxes and the more obscure fees they receive when residents register their recreational vehicles. The money will come out of the cities’ general funds, which pay for police, fire, recreation and other services and programs.

Although the cuts are not as large as anticipated, cities will nonetheless have to make up the losses. This means residents could pay higher taxes, recreation programs could be cut, pothole-ridden roads will stay unpatched and, in some cases, city staff will be laid off.

Most southeast area city officials have already made the cuts or raised taxes knowing that state legislators would be siphoning money from cities to balance the budget.

The biggest surprise to city officials was that redevelopment agencies will be forced to hand over 15% of their funds. The loss of the taxes that keep redevelopment agencies busy transforming blighted areas into such things as auto malls and office buildings will likely mean a slowdown in construction projects. Because redevelopment agencies must set aside part of their funds for low- and moderate-income housing, it could also mean housing projects will be delayed.

“It’s very severe,” Santa Fe Springs City Manager Don Powell said. “It’s the difference between growth and stagnation, and it makes absolutely no sense to take money away from the one agency that is really trying to turn the recession around.”

According to Powell’s preliminary estimate, the Santa Fe Springs Redevelopment Agency will lose about $2.5 million.

“This state budget is strictly a Band-Aid budget,” Powell said. “It’s the same old nonsense of beating up the lower ends of society to protect the higher ends.”

Few city leaders had kind words for either state legislators or the governor.

“I could live with what they did in Sacramento, if they had said: ‘This is a stopgap measure. We realize we have to put together a major economic development plan for this state. We need to put people back to work, encourage jobs,’ ” Bell Councilman George Cole said. “But they didn’t do that. And I think it’s going to be the same old thing next year.”

Or as La Mirada City Manager Gary Sloan said: “If a city manager did a job as bad as the state, that city manager would be fired.”

Details were still sketchy late last week, but here is a look at what some Southeast-area cities are facing:

BELL

These are not happy days in this tiny city, already reeling from the recent closure of its card club. The state budget will siphon an additional $325,000 from its $6-million general fund, and $206,000 from its Redevelopment Agency. In a special meeting Wednesday, the City Council passed a budget that was $1.2 million smaller than last year’s, and voted to lay off four maintenance workers and one community service officer. In addition, the council eliminated 11 vacant positions, including three police officers, City Administrator John Bramble said.

“What’s sad is not just that the state had to (balance the budget) on the backs of cities and counties, but that cites were (hurting) anyway,” he said.

CERRITOS

Cerritos will survive the state’s raid on the general fund better than many Southeast-area cities because of the income from its mall and auto center. Also, it charges no property taxes, which reduces the amount the state will take from its general fund.

However, the state also wants $2.8 million from the city’s Redevelopment Agency--money the agency does not have, City Manager Art Galucci said.

All of the Redevelopment Agency’s funds are tied up in projects, bonds and other obligations, Galucci said, so he plans to recommend that the agency borrow the money from the city’s $20-million reserves.

“The bill just says if you don’t have it, get it,” he said.

Galucci said the City Council later this month will go over a list of projects to decide what must be postponed. Among the projects the council will consider are a $3.5-million senior center and landscaping, traffic signals and street rebuilding near the Cerritos Town Center.

CUDAHY

Like Cerritos, this small city also does not receive property taxes and so does not stand to lose as much from its $3.5-million budget.

City Manager Jack Joseph said the state will take about $21,000 in cigarette taxes from the general fund, and $143,000 from the Redevelopment Agency.

“This is nothing like what we could have been hit with,” he said. “We’re grateful to the governor for holding out and protecting city funding.

LA MIRADA

Earlier this year, city officials laid off five employees, eliminated 10 vacant jobs and cut back street maintenance in anticipation of a $1-million loss to the state. Preliminary estimates show, however, that the state will take about $700,000 from the city’s $13-million general fund.

“We’re right where we thought we’d be. We’re not changing the budget, not messing with it. We’re set and ready to roll,” City Manager Gary Sloan said.

The state will also take about $500,000 from the city Redevelopment Agency, Sloan said. To absorb the loss, the agency will default on one year of interest payments on loans from the city, and will probably delay some projects.

LAKEWOOD

As city spokesman Don Waldie put it, officials are still trying to “figure out the level of pain” here.

The state will take about $165,000 from the city’s $26-million general fund, and $310,000 to $335,000 from its Redevelopment Agency.

Waldie said the city would probably make up for the loss with a hiring freeze, a delay in capital improvement projects, and by using cheaper office products and reducing landscaping.

“It’s not devastating,” he said. “We won’t be passing this on to the residents. We’ll absorb the blow, save wherever we can, pinch pennies until they bleed and wait to see what happens next year.”

NORWALK

The City Council has already laid off 11 employees, passed an 8% tax on utilities and took $800,000 out of reserves anticipating that the state would take $1 million. Norwalk Assistant City Manager Sanford Groves said last week that he expects the cuts to amount to $500,000 to $700,000 in property tax revenue.

“It looks like we figured just about right,” Groves said.

However, he cautioned that Norwalk and most cities still cannot adjust their budgets accurately.

“It will probably be months before we know what the fine print is,” he said. “I don’t know anyone who knows exactly what’s going on.

SOUTH GATE

The city is still assessing its budget losses, but so far City Manager Todd Argow estimates that the city will have to give the state about $200,000 from its $19-million general fund, and about $500,000 from the Redevelopment Agency.

Argow said some of the losses to the general fund were anticipated, prompting a hiring freeze and across-the-board reductions in all city departments. But, he said, the City Council will have to consider more cuts later this month.

Times staff writer Gerald Faris and community correspondents Kim Frick, Kirsten Lee Swartz and Emily Adams contributed to this report.