Gov. Arnold Schwarzenegger’s expected announcement Thursday morning of his revised budget proposals will be closely watched by local municipalities.

That’s because the governor will indicate whether he will advocate borrowing property tax money from cities and counties.

Whether city and county coffers will be raided could depend on whether voters approve a host of ballot measures in Tuesday’s special election.

But even if voters OK the measures the state still could borrow the property tax money because the state is expecting a $15 billion budget gap if all the ballot measures pass.

Schwarzenegger will release two proposed budgets, one assuming the ballot measures pass and one assuming they fail, which would result in a $21 billion budget gap.

A potential hit to cities and counties would come as they are already bracing for lower sales, hotel and property tax revenues. Last week, the County Assessor’s Office announced a historic drop in property taxes expected at 2.5 percent countywide.

RANI GUPTA

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