LOS ANGELESS -- California's local governments are responding to $1.3 billion of state budget cuts by raising fees and reducing services and future capital projects, according to a Standard & Poor's Corp. report expected for release today.

The cuts in aid for counties, cities, special districts, and redevelopment agencies represent "the most profound shift in state-local financial relations since the enactment of Proposition 13," the property tax-cutting measure voters approved in 1978, the rating agency said in a Credit Week Municipal report.

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