GOVERNMENTS: STATE ENERGY WOES HAVE CITIES FEELING THE CRUNCH PROGRAMS FACE BUDGET CUTS AS POWER BILLS DRAIN COFFERS.

Byline: Dominic Berbeo Staff Writer

With Gov. Gray Davis set to unveil a revised budget today, officials already have put some programs on hold and warned cities and counties that funding for many programs is in jeopardy because of the energy crisis and a slow economy.

A financial report last week from state Legislative Analyst Elizabeth Hill recommended cuts of $2.5 billion for the coming fiscal year and annual cuts of $1.7 billion thereafter to avoid budget deficits.

Assembly Speaker Robert Hertzberg, D-Van Nuys, said the outlook was grim for areas like education, transportation and health care, which suffered in the recession of the early 1990s.

``We must make additional investments in these areas,'' he said in a written statement, ``but the numbers we received suggest we may be forced instead to make real cuts.

``As bad as these numbers are, unless California gets relief from outrageous wholesale prices for electricity, they will surely get worse.''

State officials say any cuts will be aimed at expanding or newly created programs while cutbacks in existing items are less likely.

One area already earmarked for a possible cut is a newly approved program to support caregivers with elderly dependents.

The $125 million federal Family Caregiver Support Program is operated through local governments, with the federal government supplying 75 percent of the money and states making up the rest.

Los Angeles, which would get roughly one-third of California's projected $12 million allocation, may not start the program in July as planned. A state memo blames the ``uncertainty surrounding California's energy supply situation'' for a delay in state commitment to the program's funding.

``There is a great need to provide support to caregivers who are working and taking care of elder relatives,'' said Ann Delorise Smith, general manager of the city's Department of Aging. ``We've been planning for this new program for six months. It would be a shame to lose it now.''

Bill Fujioka, the city's chief administrative officer, said local officials will be keeping a sharp eye on the unfolding state budget process with concern.

``There is tremendous uncertainty,'' he said. ``Los Angeles is growing and there are some areas in dire need of expansion.''

While cities like Los Angeles receive millions of dollars in funds from the state, budget cuts will likely be felt even more at the county level, where many state programs are administered.

``We're watching from the balcony,'' Fujioka said, ``but they're watching from the front line.''

One area that might be affected is $250 million the county expects from the state in relief funds to replace property tax revenues rerouted to schools in the early 1990s.

``We are very concerned,'' said Los Angeles County Chief Administrative Officer David Janssen, who was in Sacramento last week lobbying for county funds.

``We've had three very good years, and we just hope this current situation is not an ongoing trend.''

The county, which receives some $3.8 billion annually from the state for locally run programs, could see cuts in expansion plans for transportation and extending free health care to needy families through the Healthy Families program, Janssen said.

For Ventura County officials, who have already projected a $7 million shortfall, the budget cuts and increased energy costs couldn't come at a worse time.

``We know there's an impact, we're just trying to cope with it and minimize it as best we can,'' said John Johnston, Ventura County's chief administrative officer. ``It makes people at the local level very nervous.''

Ventura County officials were relying on the state surplus to help enhance health care and other local programs that suffered major cutbacks in the early '90s.

``We were looking to the state to give us some relief, but now their reserves are on empty,'' Johnston said. ``It's possible we are all at risk.''

Local governments are also facing the rising cost of electricity and natural gas. Janssen said Los Angeles County's energy bill could double to $140 million in the upcoming fiscal year, Janssen said.

The county has more than 5,000 buildings and 95,000 employees, and is currently one of the five largest customers of Southern California Edison.

A state bill that would have allowed the county to purchase power from the Los Angeles Department of Water and Power could have created a savings of $25 million, Janssen said.

But the bill, AB54X, would have changed existing law that prohibits public utilities like DWP from selling directly to customers of private companies in the state's energy grid.

The bill was passed by the Assembly, but derailed on Tuesday by Sen. Debra Bowen, D-Marina Del Rey, who chairs the Senate Energy Committee.

A reshuffling of the county budget will have to happen to compensate for the extra energy costs, Janssen said, but it is too early to know what programs will lose. The county will try again to pass the bill during the next legislative session.

Ventura County officials are researching whether they can become a aggregate energy supplier in an attempt to make energy prices a bit more certain and stable and are working with local city governments and legislators.

``We're trying to see if there is a local solution instead of waiting for the state and feds to do so,'' Johnston said. ``If the state can't do it, it may be beyond capabilities, but it's a thing we have a responsibility to explore.''

The main concern for the moment is where impending cuts will take place at the state level.

While legislators have enjoyed huge surpluses over the past two years, they were forced to approve a $13.4 billion bond measure week to pay back some $6.7 billion in emergency electricity purchases to state coffers and prepare for future energy costs.

Questions over whether the bond issue will be enough and whether the economy will revive have left city, county and state government facing many months of uncertainty.

Staff Writer Bhavna Mistry contributed to this story.