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Vallejo, a city on San Pablo Bay just north of San Francisco, has reduced its police force from 155 to 115, closed three fire stations, and halted capital projects that include road and sidewalk maintenance.

Now, it must give up more. The California budget deal being considered in Sacramento Thursday will take some $6.5 million of the Vallejo鈥檚 $65 million annual budget 鈥� part of more than $4 billion the state government would take from municipal and county governments in a bid to close the budget deficit.

鈥淚f the state takes more of our money, we will be forced to make decisions on street lights or more public safety or other untenable forces,鈥� says Craig Whittom, assistant city manager of Vallejo, which filed for bankruptcy last year.

Cities across California already facing deep recessionary cutbacks and layoffs are pushing back against the budget deal, which was announced late Monday by Gov. Arnold Schwarzenegger and lawmakers.

The League of California Cities, an association of city officials, has enlisted 180 cities to file suit for what it says are 鈥渦nconstitutional seizures鈥� of local taxpayers鈥� funds.

Citing a recent decision by the Sacramento Superior Court which found that the state illegally took $739 million of public transit funds last year, Eva Spiegel, spokeswoman for the League, says, 鈥淭his is going to harm people very seriously.鈥�

鈥淭hese budget cuts are going to be devastating to all cities and counties but to towns like Vallejo, the situation will be unrecoverable,鈥� says Stephanie Gomes, a Vallejo city councilwoman.

Public safety is hurting with the current cutback, says Lt. Adel Tenorio, professional standards division for the Vallejo police. Police have had to eliminate three substations and community-based policing initiatives. They have stopped using police in schools, and cut the narcotics team in half.

"Staffing is lower so response times are not as fast," says Lieutenant Tenorio.

Mayor Osby Davis has been pitching an exemption for 鈥渄istressed cities,鈥� but it's unclear whether there would be such an exemption and how it would be defined. Vallejo filed for Chapter 9 bankruptcy which does not have the option of restructuring its debt.

Even temporary diversion of funds hurts the city, observers say, because deferred maintenance of capital projects such as roads and sidewalks means fixes are far more expensive later.

Vallejo has applied for federal stimulus funds, but those are only one-time payouts, says Vice Mayor Hermie Sunga. The city won鈥檛 know about such funding for at least two weeks. And stimulus funds are not designed to support ongoing operations, while the money the state is taking supports those operations, adds Mr. Whittom.

The state鈥檚 borrowing billions in property taxes from cities and counties is technically legal, admits League of California Cities鈥� Ms. Spiegel, but says cities simply can鈥檛 take the hit at this time.

鈥淭he state is telling us we can handle the hit because we can get loans based on their repayment plan, but we have no confidence that we can get loans based on the state鈥檚 guarantees,鈥� she says. 鈥淭he state鈥檚 bond rating is the worst in history and they are already paying workers and vendors with IOUs. Who would loan money to cities and towns in this situation?鈥�