L.A. Revenue Loss Less Than Feared : Budgets: The city will receive $48 million less in funds from the state. But deeper reductions are expected the following year.

After fearing massive cuts from Sacramento that would have thrown the city’s budget into disarray, Los Angeles officials reacted with a mixture of relief and concern Tuesday to scaled-back reductions from the Legislature, which will still necessitate significant local belt-tightening.

California’s largest city will receive an estimated $48 million less in state aid in the fiscal year that begins July 1. But the situation will be even worse the following year when the state takes back $23 million in vehicle license fees that it granted to Los Angeles for fiscal 1993-94, city officials said.

“The good news is that $48 million is on the low end of what we expected,” said Katharine Macdonald, an aide to Councilman Zev Yaroslavsky, who chairs the city’s Budget and Finance Committee. “The bad news is it’s going to be worse next year.”

The onus will be on Mayor-elect Richard Riordan--who was in Washington on Tuesday lobbying for additional federal funds--to come up with a plan to compensate for the state cuts while keeping his campaign pledge to avoid tax increases.

Riordan, who made his business acumen a chief selling point during the campaign, will have to begin making painful and controversial funding choices from his first day in office July 1, city officials said.

“Riordan is going to have a lot of tests--one test after another,” said Councilman Mark Ridley-Thomas. “This is his first.”

Gov. Pete Wilson’s original budget proposal contained “disastrous cuts” to local government, said the city’s Sacramento lobbyist, Norm Boyer. The $52.1-billion compromise budget approved by the Legislature, which is subject to some adjustments, is at least manageable, Boyer said.

But even the reduced cuts will entail difficult choices for a city with sagging revenues that just struggled to close a $190-million deficit. To close that deficit, the city maintained a freeze on most hiring, granted no raises for the second consecutive year and laid off dozens of employees. Departments throughout City Hall had their budgets slashed.

The next round of budget balancing is expected to include politically popular programs that narrowly escaped the ax this spring, such as city libraries, after-school programs and street maintenance work.

“It will be very painful and very difficult,” said Councilman Marvin Braude, who joined a delegation of officials in Sacramento earlier this month to lobby state lawmakers. “We’re going to have to downsize to achieve it.”

But Ridley-Thomas said the $48-million figure is far lower than the earlier estimates. “Painful, yes,” he said, “but a lot less painful than had been expected.”