First, donations to non-profits dwindled. Now, looming state government cuts are putting even more pressure on agencies that provide everything from child care to legal assistance.

It's an economic downturn one-two punch.

``We are being hit on both sides,'' said Richard Konda, executive director of the Asian Law Alliance in San Jose, an agency that helps low-income legal immigrants.

California, facing an estimated budget shortfall of $15 billion in the fiscal year that starts in July, is experiencing its worst deficit in a decade. County officials across the state are beginning to calculate cuts to non-profits. Today, the Silicon Valley Council of Nonprofits holds a forum beginning at 10 a.m. with state legislators at the Santa Clara County Board of Supervisors Chambers, 70 W. Hedding St., San Jose.

``It looks very bleak,'' said Nancy Tivol, who heads Sunnyvale Community Services.

The Emergency Housing Consortium in San Jose, which provides shelter to 1,200 people a night in Santa Clara County, is projecting an $800,000 to $1 million cut in funding in the next fiscal year. At least $500,000 of the shortfall could come from state cuts, said Barry Del Buono, executive director of the agency, which has an annual budget of about $10 million. The cuts could mean the organization will turn away at least 3,300 men, women and children seeking shelter and food, medical and other assistance.

Surplus vanished

``Between the economy going in the tank and the energy crisis, the surplus that the state had is gone,'' he said.

The Asian Law Alliance, which already has experienced a 20 percent cut in private donations, is facing a possible elimination of virtually all its state funding, which represents about 15 percent of its $600,000 annual budget. Such a cut would mean at least 100 people won't be served by the agency. The cuts, spread out over similar organizations in the area, would mean thousands of people won't get the legal help, Konda added.

Meanwhile, the valley's economic slide has dramatically increased the number of people who have been laid off and now need help. Sunnyvale Community Services expects to provide as much as $600,000 in assistance this fiscal year, from financial aid to food -- up from $300,000 in 1999-2000. Indeed, the number of California families on welfare is on the rise for the first time in six years.

``The sector is not going to be able to absorb the problem,'' said Patricia Gardner, executive director of the Council of Nonprofits.

In Santa Clara County, each department that contracts with non-profits is approaching the cutbacks differently, said county budget manager Leslie Crowell.

San Mateo County officials hope to absorb much of the state cuts to human service programs and not pass them on to non-profits, said Glen Brooks, central regional director of the county's Human Service Agency.

An area of deep concern, though, is a proposal by Gov. Gray Davis to eliminate low-cost child care for people after they have been off welfare for two years, which would add an enormous financial burden to those who earn relatively low salaries in high-cost regions such as the Bay Area, he said. The governor also has proposed lowering the eligibility income threshold required for subsidized child care from $35,100 to less than $31,000 a year for a family of three.

Santa Clara County officials estimate the new eligibility requirement, plus other proposed changes, could immediately bump more than 2,500 children out of child-care programs.

Incentive pay loss

Furthermore, Santa Clara County's CalWORKS program -- California's version of the federal welfare program -- could lose at least $6 million in ``incentive funds'' it had hoped to give to non-profits to provide support to the working poor trying to stay off the government dole, officials said.

``There has to be some equity,'' said Assemblyman Manny Diaz, D-San Jose, who will moderate today's forum. ``We need to make sure we are not doing this on the backs of'' the poor.

Contact John Boudreau at jboudreau@sjmercury.com or (408) 278-3496.