Weighed down by a struggling economy, government agencies in California shed 37,300 workers last month - more jobs than were lost in the private sector - as cities and counties made their biggest payroll cutbacks since at least 1990.

What's more, analysts see more job cuts ahead as California faces an estimated $10-billion shortfall in the state budget that the next governor must address. Cities and counties, meanwhile, are still struggling with tepid sales and property tax revenue.

"Local governments are adopting austerity measures," said Jerry Nickelsburg, an economist with the UCLA Anderson Forecast. "They don't have confidence that they're going to get money to do otherwise."

Joe Galvez, 43, was hit with a double dose of government cuts. He lost his job with the Los Angeles County Public Works Department in 2007 and hasn't been able to find steady work since. And, he said his son's high school is so strapped for funding that it has asked parents to donate money for school supplies.

"It's gotten so bad that schools are reaching out to the parents," said Galvez, a single father of three who collects scrap so he can come up with rent for the family's Baldwin Park home. "It's bad, man."

Cities across the state have taken stringent measures to balance their budgets, said Eva Spiegel, a spokeswoman with the League of California Cities.

Oakland laid off 80 police officers and delayed pothole repairs. Fullerton laid off 14 police officers and three firefighters, cut library hours and closed restrooms at several parks. Oceanside laid off 28 police officers and three firefighters, closed a swimming pool and a recreation center and eliminated the city Bookmobile.

"Decreasing sales tax revenues and decreasing property tax revenues mean that a lot of cities have had to do some belt tightening," Spiegel said.

Overall, the state's unemployment rate remained stuck at 12.4%, one of the highest in the nation. The state lost a net 63,600 jobs in September. Local governments shed 32,400 jobs, according to the monthly report from the state Employment Development Department released Friday.

The agency said 13,300 jobs were lost in construction, manufacturing shed 2,000, and even the usually dependable health and education services sector lost 13,600.

More pain is likely to come in government cuts.

Taxable sales plummeted 18.5% in California from 2006 to 2009 and are expected to remain relatively flat this year, according to the National University System Institute for Policy Research in La Jolla.

And cities won't be able to count on new property tax revenue because fewer new homes are being built. California builders started construction on 1,811 homes in August, down 12% from the month before and 77% from the August peak in 2006, according to the California Building Industry Assn.

And the state budget deal, signed by Gov. Arnold Schwarzenegger on Oct. 8, has many worried that cuts could get even worse. State workers, knowing that deficits are projected for the next few years, are hoping to hang on to what jobs they can against pressure for additional cuts, said Doug Crooks, a spokesman for the Service Employees International Union Local 1000, which represents state employees.

It will "impact services, the people who provide services and the citizens of California who use these services," he said. Already, inspections of hospitals and other services are slowing down, he said.

Demand usually increases on government services during an economic slowdown, but without revenue coming in public entities have to lay off workers, said Stephen Levy, director of the Center for Continuing Study of the California Economy.

The government cuts aren't unique to California.

The National League of Cities reported this month that cities across the country were making their sharpest cuts in at least a quarter of a century. Nearly 80% of city finance officers in a survey reported laying off staff, and 87% said their cities were worse off financially this year than last year.

California may be worse off than other states because of the magnitude of its construction boom and bust, Levy said. Property values are depressed by foreclosures, and that will affect property tax revenues - which are also being hit by a lack of new construction.

"Most of what ails California is related to the much more pronounced construction cycle that we're having," Levy said.

The public-sector layoffs are a blow to employees like Latausha Jones, a clerk in Los Angeles County traffic court. She sought government work because she thought it would be more stable than the private sector.

"I thought it had job security, had good benefits, and it was a place I could grow," she said.

The Lomita resident was laid off in March and now goes to food banks for herself and her 13-year-old son. The court is hiring back some employees on a part-time basis but isn't offering benefits, so Jones is continuing to look for full-time work.

"I haven't found a new job yet," said Jones, 35. "I'm just looking like everybody else."

There were 2.3 million people out of work in the state in September. About 225,000 will run out of unemployment benefits by the end of the year, according to the National Employment Law Project.

The unemployment rate in L.A. County was 12.6%, the same as in August, even though the county added 11,600 jobs in September, mainly in education and health services, government and professional and business services.

Orange County's unemployment rate was unchanged at 9.6%. That area added 4,600 jobs in government, education and health services. The government job gains came from the start of the school year, the state employment agency said.

In the Riverside-San Bernardino area, the unemployment rate also remained unchanged at 14.8%. The area lost 2,600 jobs, with 1,900 of those cuts coming in government. Construction and leisure and hospitality also lost jobs in that area.

Ventura County added 900 jobs, pushing its unemployment rate down to 11.1% from 11.2% the month before. San Diego County's unemployment rate was unchanged at 10.6%; the county lost 100 jobs.

Many public officials aren't optimistic about significant improvement any time soon.

"We're going to be losing more people from our organization over the next one, two and four years," said Larry Walker, San Bernardino County's clerk, treasurer and recorder. "In the foreseeable future, we're going to see more cuts."