Citing reservations about seeing any drastic improvement in Southern California’s recession-plagued economy, pubcaster KCET Tuesday adopted what station officials term a “cautious and conservative”$ 40.3 million annual budget for the fiscal year beginning July 1.

The station had budgeted $ 40.5 million for the current fiscal year, but a KCET spokeswoman says it will have spent only $ 39.5 million-$ 40 million by the end of this month.

KCET achieved the cost savings by laying off 19 staffers and eliminating a number of non-programming services over the past year.

The station was also forced to cut three of 28 episodes earmarked for the locally produced docu series “Life and Times,” but other programming was left essentially intact.

KCET doesn’t anticipate any layoffs under the new budget, which is about $ 2 million less than the record allotment approved by the board of directors in 1991, when the station produced the series “The Astronomers.”

More than $ 20 million of the new budget will be devoted to programming and production.

All of the station’s existing series will return in addition to several new local and national productions, with an emphasis on issues involving children, local and statewide issues as well as educational services, according to KCET president-CEO William Kobin.

But drama will play a smaller role on KCET’s agenda, largely because its primary customer, PBS’ “American Playhouse,” has eliminated studio-based productions.

KCET has been moving more toward features such as “Roosters,” its largest drama ever. The pic, which stars Edward James Olmos, recently wrapped production for “American Playhouse.”

Although KCET has never produced dramas on an annual basis, a spokeswoman acknowledged that “funding for drama is becoming increasingly difficult” because foundations and corporations simply aren’t as interested.

One source close to the station speculated that may be because “dramas have inherently more controversy” than other forms of programming.

While the station wants to stay in the drama genre — it has a project in development with a partner and is looking at another script — the station rep says viewers “may see less drama on KCET.”

So the station has focused on other areas, particularly kid’s fare.

Production is set to begin late this fall on the half-hour pre-schooler strip “The Puzzle Factory,” a co-production with Lancit Media/New York. And “Storytime” will enter its second season with 20 new episodes.

KCET also will begin production this fall on “The Human Quest,” a new national series from documentarian Roger Bingham, and is producing “Power Plays, ” a six-hour prime time series on the business of sports.