REDWOOD CITY -- Many educators are starting to fear that Gov. Arnold Schwarzenegger's public safety emergency could turn into an education crisis.

Schwarzenegger declared a state emergency on Dec. 18 to funnel money to cities and counties that was lost when the newly-elected governor slashed the car tax, known as the Vehicle License Fee. Local governments are allocated the VLF to fund police and fire services, and when it was reduced, it sent local governments budgets into a tailspin.

In announcing that he would backfill the two-thirds, Schwarzenneger enacted $150 million in cuts to social services and higher education.

The state still has yet to find the rest of the $2.7 billion needed to fund the entire VLF backfill, in addition to filling a $14 billion budget hole. Facing such massive problems, in a widely publicized interview, Schwarzenegger suggested suspending Proposition 98, which guarantees a certain level of school funding.

This combination of events has left educators fearing the worst from the upcoming Jan. 10 budget proposal.

"I think everyone will be hit up for the VLF funds," said Susan Alvaro, who sits on the San Mateo County Board of Education. "I think its ridiculous. It was just a bad move all around."

Higher education is already feeling the VLF sting. Using new gubernatorial powers, Schwarzenegger took $53.6 million from the University of California and California State University systems without a vote of the Legislature to partially fund his VLF fix.

Much of that money will come out of university outreach programs, which help attract a diversity of students to the UC and CSU systems. The leaders of both university systems said they would refrain from taking immediate actions -- such as raising fees or ending programs -- until after Jan. 10.

However, CSU Chancellor Charles B. Reed said the cuts meant enrollment growth would be curtailed by another 5,000 students. The burgeoning 409,000-student system already curtailed its growth by 30,000 students last year.

The mid-year cuts come after more than $950 million combined reductions to both UC and CSU systems in the last year-- a budget hole that spurred 40 percent student fee increases.

Community colleges also suffered a $250 million budget blow last year, and the Legislature raised per-unit costs from $11 to $18. Unlike the UC and CSU systems, the community college districts have no say over their fees.

The recent hike did not bring in extra revenue for the community colleges; it just made up for some of the lost revenue, said Karen Schwarz, the chair of the San Mateo County Community College District Board.

Schwarz anticipates another legislative push for a further fee hike as the state faces another deficit -- one that has grown larger with the addition of the VLF backfill.

"What they wanted to do originally is $26, instead they did $18, so we may see that number creep up again," Schwarz said. "I hope not, but I wouldn't be surprised."

The three-campus community college district already shouldered a $10 million cut to their $113 million budget last year. Classrooms are overflowing as the district cut course sections, and many students were locked out of classes.

Systemwide, California community colleges lost 90,700 students over the past year, primarily due to the loss of course sections to budget cuts, according to the state community college chancellor's office.

The K-12 level also received an across-the-board 1.6 percent reduction in per-pupil spending last year -- more and deeper reductions could come to education next year, especially if Prop. 98 is suspended, educators warn.

Proposition 98 guarantees that a certain percentage of the state budget -- currently around 40 percent -- goes to K-12 schools and community colleges.

Community College Chancellor Thomas Nussbaum compared the Prop. 98 pledge to schools to the VLF promise to cities and counties.

"If the state has an obligation to compensate local governments for lost car tax revenues, as some people have said, then surely the state also has an obligation to fulfill Proposition 98's constitutional promise to California's school and college students," he said.