DON'T bother looking in the mirror, Milpitas. Those lovely flowing locks of hair representing the ample reserves in the city's redevelopment agency funds are gone. Just like that the state reached in and hauled away $11.8 million. And to add insult to injury, zapped another $1.7 million from the city's general fund property tax, sort of scissoring off the ponytail.

It is all part of the artfully creative repairing of a Sacramento budget shortfall of $24 billion for the fiscal year we are now well into. The next fiscal year budget planning has begun and the numbers aren't looking a lot more hopeful. It will be interesting to discover what the governor has in mind for an encore.

The city, under state laws governing redevelopment, is allowed to gather in all the gain in property taxes which improvements caused by RDA spending have brought about. These "tax increments" normally would go into future RDA projects to cure "blight" locally. Now a chunk of that fund won't be seen again. It means about a one third reduction in the proposed $35 million RDA spending plan for the year. But as a smaller comfort, the $1.7 million will come back to the city over the next three years with interest. At least, that's the promise.

All this churning comes as a result of a legislative stranglehold preventing any new taxes wielded by the Republicans. So the vacuum cleaning of assorted reserves and forced borrowings seem to be the only answer to getting the balanced state budget required


by law.

And if these contortions weren't enough, the state is now faced with a federal court order to reduce its prison crowding by moving out about 40,000 inmates, from a total of 160,000. The state's 33 prisons were designed to hold about 85,000, so even with the proposed cut, the overcrowding will be at about 137 percent. Sacramento must come up with a plan for accomplishing this within the next month.

The result could well be the moving of lesser offenders back to their home communities and housing them in county jails such as Elmwood in Milpitas. Or we could see large numbers of felons sent back to house arrest despite parole officers already burdened with heavy case loads. The impact on police and sheriff's forces, which are being cut back as well, could also be serious for local governments. Many of the released inmates will need mental health services and drug and alcohol counseling. These are among the social services under great pressure in the budget slashing at the state level.

The governor's initial response was to offer a smaller cutback of $27,000. Most of these would be sent home, including any non-citizens deported to their home countries. The idea of renting space in the prisons of other states is another option as is the building of new prisons. Ultimately, it could mean the reduction of sentences for some felonies back down to misdemeanors and county jail time.

There doesn't seem to be any light at the end of the labyrinthian tunnel in which state government finds itself. In the meantime, the local level takes a big hit.