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California’s fight against runaway production has taken another bullet.

Amid cuts aimed to narrow the state’s $38 billion budget deficit, the California Film Commission’s 2003-04 funding was slashed July 29 by 90%. Gov. Gray Davis is expected to sign off on the compromise budget that reduces the commission’s coin to just $1.2 million.

That means the Hollywood-based org — one of the highest-profile among the 180 or so U.S. commissions — will be able to do little more than issue permits for filming on state property. And it will pull the plug on the Film California First incentive program, which had doled out $16 million in service reimbursements over the past 2½ years to keepproduction in the state.

The argument that every dollar spent on film production generates at least twice that level of economic activity apparently fell on deaf ears.

“Film commissions and offices are having to go to great lengths to defend their role as generators of economic activity,” notes Pat Kaufman, head of the Assn. of Film Commissioners Intl. “It’s an industry that generates jobs, so I think the state is really sticking its head in the sand.”

Patti Stolkin Archuletta, who was California film commissioner from 1991-99, fears the commission will be forced to operate on a bare-bones basis — much as it did when she started her work.

“It’s a sad statement to think that we’ve come full circle,” she muses. “This is definitely not a step forward.”

She predicts the dozens of city and county film commissions in California might — out of budgetary necessity — form some kind of private organization to promote filming in California.