Officials Bracing for Cuts : State budget: Valley cities would lose hundreds of millions of dollars under governor’s spending package.

The recession-driven state budget unveiled Friday by Gov. Pete Wilson would cut hundreds of millions of dollars from San Fernando Valley-area cities that count on the funds to pay for police, fire and other services.

But not everything in the Valley area is being trimmed.

In his $51-billion spending package, Wilson proposed that the new state prison in Lancaster, set to open next month, receive $61.1 million for its first full year of operation. Mission College in Sylmar would get $8.1 million for a new library and learning center, and Cal State Northridge $17 million for construction projects, including a physical education building.

But college students using those new facilities are expected to have to pay higher fees under Wilson’s spending plan. Under the budget, community college fees could triple from $10 a unit to $30 a unit. At CSUN, students are expected to pay more too, though the specifics have not yet been spelled out.

The grim budget picture painted by the governor at a Capitol news conference was part of his overall message that the state, which last summer endured a protracted budget impasse, must be prepared for further belt-tightening.

At the top of Wilson’s hit list were cities, counties and special districts that had relied on state bailout money after the 1978 passage of the property-tax cutting Proposition 13. State officials began to chip away at the bailout package during last summer’s budget crisis, when $1.3 billion was shifted from local governments to education.

Now, Wilson has proposed to shift another $2.6 billion in property tax revenues from cities, counties and redevelopment agencies to school districts to help balance the budget for the fiscal year that begins July 1.

As a consequence, the cash-strapped city of Los Angeles could lose $300 million, according to city lobbyist Norman Boyer, who predicted that the proposal, if enacted by the Legislature, would be disastrous for city services, including those in the Valley.

“I frankly don’t know where the cuts will be made, but obviously there will be significant and deep cuts,” Boyer said.

Assemblyman Richard Katz (D-Panorama City), expected to formally enter the Los Angeles mayoral race next week, said he had not seen Wilson’s budget and it was too early to tell how it would be received in the Legislature.

Katz, however, cautioned that if Wilson seeks to cut funds to the city by several hundred million dollars, “that would cripple our ability to put police and firefighters on the street.”

Wilson did not spell out how the cuts would affect individual local agencies.

But Valley-area officials--from Santa Clarita and Burbank to the Antelope Valley--fretted about the effect of the state budget on local projects.

For instance, the proposed $300-million cut in statewide redevelopment funds would take an estimated $654,000 from the $4.7-million budget of the North Hollywood Redevelopment Project, according to Marc Littman, a spokesman for the Community Redevelopment Agency in Los Angeles.

“Is this going to happen every year?” asked Jerry Belcher, head of the North Hollywood Redevelopment Project. “If this is a onetime thing, that postpones a lot of things. But if they’re going to take a half million from every year, that is a major setback.”

In Burbank, the loss of redevelopment money would be keenly felt. Burbank has reconstructed its downtown through the use of redevelopment funds and hopes to build, partly with such funds, a 20,000-seat arena near Burbank Airport.

“We’ve been bracing ourselves for this,” Burbank City Manager Robert Ovrom said. “This would probably cost us about about $3.5 million in redevelopment funds.”

Burbank would also lose an estimated $5 million in state bailout funds sent to cities after the passage of Proposition 13, Ovrom said.

“This is just the opening gambit. We expect it’s going to get worse before it gets better,” Ovrom said. “Until the economy in this state picks up, we’re just going to have to keep cutting away.”

Santa Clarita would not be affected by the elimination of bailout funds because it incorporated in 1987, well after Proposition 13 passed, said Mike Murphy, the city’s intergovernmental affairs officer.

In Santa Clarita, however, the cuts in redevelopment funds might hamper the city’s ability to get its fledgling redevelopment project in Newhall off the ground.

City officials in the Antelope Valley cities of Lancaster and Palmdale expressed similar concerns.

Lancaster Mayor George Root said he had only seen a one-paragraph summary of the budget, but from that summary estimated that Lancaster would lose about $4.8 million, the same amount lost in last year’s budget. He predicted the biggest chunk cut would be about $3.5 million in redevelopment funds.

“Wilson chokes off the very lifeblood of attracting businesses to cities,” Root said. “I don’t think he’s solely to blame, but he’s at the helm. We have to reduce our staff and expenses to match our budget. It’s unfortunate that the state doesn’t have to do that.”

Bill Ramsey, Palmdale’s director of finance, said he didn’t think the city would be affected as deeply by the budget cuts as other local governments that rely more heavily on property taxes. He said the city lost about $90,000 in property tax revenue from state budget cuts last year, and predicted it would lose another $787,000 this year.

Also in the Antelope Valley, the area’s largest state institution, the new state prison, is expected to get $61.1 million for operations beginning in July.

But the future of fairs run by state agricultural districts, including the popular Antelope Valley and San Fernando Valley fairs, was made less certain in the Wilson budget. The governor proposed turning them into private enterprises, though the details are still to be determined.

On the education front, college officials were gearing up to deal yet another lean budget year.

Blenda J. Wilson, president of Cal State Northridge, said in a statement that task forces made up of faculty, students and staff are being organized to study ways to cut costs.

CSUN students are also expected to face higher fees in September because the trustees of the state university system and community colleges are authorized to boost fees by a still undetermined amount.

Wilson acknowledged the need to conform to the “unfortunate reality” of the state’s financial problems. But, she added, “What is most regrettable is that this sixth consecutive year of budget cuts to higher education will further erode our ability to serve all of those citizens whose talents and energy are essential to the well-being of our community.”

CSUN spokeswoman Kaine Thompson said the state budget cuts are not expected to affect the $17 million the university is receiving from the state for new construction projects, including a new physical education building. Those funds were part of funds raised through a state bond issue, and are intended to be used solely for new construction.

Gladstone reported from Sacramento and Zamora from Chatsworth. Also contributing to this story were Times staff writer Patrice Apodaca and correspondent Blaine Halley.

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