California's ocean of red ink is threatening its pursuit of a green future.

When the state froze bond money spending last month, most of the public attention focused on roads, levees and other public works projects that were put on hold. But the freeze also devastated conservation groups in the region that were counting on bond money to build trails, plant trees, clean waterways and close land deals.

Not only is the loss of this money shutting down projects, it's forcing many environmental nonprofit groups to lay off staff or close. Those that spent their own money and were awaiting state reimbursement have been particularly hard-hit.

Sandy Cooney, spokesman for the state Resources Agency, said about $637 million in bond funding to about 4,000 environmental projects in California has been suspended.

Environmental groups are certainly not the only nonprofit organizations struggling in the recession. Donations are down in all sectors, and the stock market decline has eroded endowments. But the state bond freeze hit environmental groups particularly hard, as they had tapped into billons of dollars in bonds approved by voters in recent years for clean water, parks and open space.

"This is the second big shoe that's dropped economically for us in the last six months," said Aimee Rutledge, executive director of the Sacramento Valley Conservancy. "First, the stock market collapsed. We tightened our belts to deal with that crisis, and now all of a sudden in December another shoe drops on us – the state bond freeze."

The conservancy has been unable to complete its purchase of the 1,682-acre Elkhorn Basin Ranch in Yolo County, which relied partly on a $3.8 million grant of bond funds made by the state Wildlife Conservation Board in November.

Plans to build a four-mile trail at the Deer Creek Hills preserve in eastern Sacramento County also have been put on hold.

One of Sacramento's most established environmental nonprofit groups, the Sacramento Tree Foundation, recently laid off three people and furloughed another four after $400,000 in state funds failed to arrive.

The remaining employees agreed to contribute more of their salaries for health care, which cut their take-home pay by at least 15 percent, said executive director Ray Tretheway, who also serves on the Sacramento City Council.

"It was very heart-wrenching and very difficult," Tretheway said. "We have such great programs, and we have a fabulous staff that just gives everything."

Two of the people no longer working ran the "Seed to Seedling" program, in which 2,000 area children grow oak trees in their classrooms.

"I'm going to be teaching some of those classes now," Tretheway said.

Another local nonprofit, the Sacramento Regional Conservation Corps, will hire eight fewer youth in its job training and education program this year after $300,000 in state bond funding was suspended, said Deputy Director Andi Liebenbaum.

The conservation corps hires young people to help build trails, clean roads and perform other environmental tasks. It holds classes in the afternoon to help them obtain their high school diplomas.

"The hit to me is not only do I not get to support the environment, but eight young people a week who are very likely otherwise going to end up in prison don't get to be in my program," Liebenbaum said.

The decision to freeze California's bond spending was made by the Pooled Money Investment Board, which consists of state Treasurer Bill Lockyer, state Controller John Chiang and state Finance Director Mike Genest.

Lockyer and the other board members said that until the state finds a long-term solution to its financial crisis, it will not be able to go to the bond markets to raise money.

Lawmakers are struggling to close a ballooning $40 billion budget deficit projected between now and June 30, 2010.

While the bond freeze may last six months or less, it could have long-term effects on environmental restoration and protection in the Golden State, said Joan Clayburgh, executive director of the Sierra Nevada Alliance, which provides services to 105 different environmental groups working in the Sierra.

An alliance survey of 68 groups found that 24 percent had laid off staff and 64 percent had laid off contractors.

Many of the affected projects were focused on restoring streams to improve the quality of the water most Californians eventually drink.

Clayburgh worries that trained scientists and other knowledgeable employees won't come back if the crisis drags on too long. Land deals could be lost for good.

"We're losing capacity to do this type of green work in the Sierra Nevada," Clayburgh said.

Call The Bee's Mary Lynne Vellinga, (916) 321-1094.