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anta Clarita's going to have some budget headaches this year, through no fault of the folks at City Hall. Gov. Gray Davis has his eye on Santa Clarita — and on every other city and public agency in California, for that matter — as he scrounges to cover the state's unprecedented $35 billion deficit.
     When Davis unveils his budget proposal Friday we can likely expect a round of tax-grabbing that will transcend the experience of a decade ago when then-Gov. Pete Wilson "shifted" revenues from local governments to balance Sacramento's books.
     For our valley's school districts, which are preparing to open several sorely needed campuses this year and next, the impending hit "couldn't come at a worse time," as one local superintendent said. And for our tight-fisted city, which tends to spend so frugally that it usually "finds" a couple of million extra dollars when it conducts its mid-year budget review, it's outright punishment for good behavior.
     The city of Santa Clarita preliminarily expects its $117 million budget for 2002-03 to be stripped of $698,000, a bit under 1 percent, if Davis' plan is enacted. That's probably a low-ball estimate because it doesn't contemplate an anticipated reduction in vehicle license fees — which alone contribute $5.5 million annually to city coffers.
     Already on the chopping block, city officials say, are revenues the city uses to perform some of its most basic functions, like filling potholes in the streets. Just when you thought it was tough enough to get from one side of town to the other, the city would lose its share of the state's Traffic Congestion Relief Fund to the tune of $383,000.
     And say goodbye to state reimbursement for unfunded mandates. Those are the things the state forces cities and counties to do, but doesn't pay for. Some years ago the Legislature righted this wrong, but now it appears the reprieve was temporary — and it may never come back — at an annual cost to the city of $65,000.
     Potentially in jeopardy is $1.3 million for the new community center that the City Council recently approved for placement at the former Anawalt lumber yard in downtown Newhall. The city is in line to get that much from Proposition 40, last year's state bond measure that was intended to pay for local parkland acquisition and recreation programs. Evidently Davis proposes to take money from Proposition 40 to purchase and restore wetlands that otherwise would have been acquired through the state's general fund.
     Building a new community center isn't just a fanciful whim on the part of the city. Rather, the leaky, rat-infested warehouse on San Fernando Road that has served as the community center since 1994 is a blight. The services the center provides — among them the city's successful boxing and ballet folklorico programs — are important to Newhall's Latino community, and we can scarcely afford any delays in replacing the facility because the conditions there are deplorable.
     Yet Newhall, the section of Santa Clarita that's arguably most in need of government help, stands to lose even more.
     If Davis has his way, the state will take away all unspent moneys that local redevelopment agencies have been collecting to provide affordable housing.
     This makes little sense, considering Davis himself has noted that California needs to build 250,000 new housing units a year to keep up with demand, much of it for low- and moderate-income residents. (We're building only about half that much as a state.)
     The proposed redevelopment tax-grab got some apologetic play in the press this week from the influential Sacramento Bee columnist Dan Walters, who called it "rough justice." The "redevelopment industry," he opined, would be getting what it deserves since many cities have misused their redevelopment authority and "stockpiled" their low-cost housing money "because, in fact, there's little political support for building such housing."
     There is truth in his words. Redevelopment agencies have been notorious for abusing their taxing powers to line developers' pockets in the name of community improvement. But the law changed significantly in the mid-1990s to ensure that redevelopment agencies stick to rehabilitating blighted areas.
     Certainly no system is perfect and politicians will always be on the lookout for loopholes, but Newhall redevelopment leaves little wiggle room for monkey business. In fact, the city of Santa Clarita has put substantially more than required, not less, into getting Newhall back onto a firm economic footing, spending non-redevelopment dollars to make big improvements like the opening of Railroad Avenue and a new Metrolink station.
     That's partly because Newhall's redevelopment zone is new — it was established in 1997, after the law changed to focus on blight — and our redevelopment agency hasn't yet collected enough tax revenues to make all of the necessary fixes by itself. Eventually the agency will be able to do so, and to repay the loans it has used to install old-fashioned street lamps on Railroad Avenue and subsidize some attractive new storefronts on San Fernando Road — but only if it's left alone to do its business.
     As for the agency's housing fund, state law requires redevelopment agencies to "stockpile" — in Walters' vernacular — 20 percent of their revenues for low- and moderate-income housing. Given the newness and small geographical size of Newhall's redevelopment zone, that's only about $250,000 so far. Over time our redevelopment agency will collect enough money to help rehabilitate some seriously dilapidated residential neighborhoods — unless Davis raids the kitty. I'd like to leave you with something positive by saying it could be worse. But it probably will be.

    Leon Worden is The Signal's city editor. His commentary appears Wednesdays.