POTTER VALLEY, MENDOCINO COUNTY- Line item cuts made by the governor during budget approval last week has effectively eliminated more than half of one clinic's revenues in Mendocino, and on Aug. 21, Potter Valley's only provider of health care will close.

"This will be the first of many small clinics in rural California that will have to close," said Cathy Frey, executive director for the Alliance for Rural Community Health, which advocates for the county's health centers.

"There is this misconception that the clinics will be OK, they receive federal funding and they have this stimulus, but not all of our clinics are eligible for those dollars."

Last week, Gov. Schwarzenegger approved the elimination and reduction of three state grant programs that provide more than half of the revenue for the Potter Valley Community Health Center, which is the only provider of care for about 3,200 people in the isolated community. In addition to lost funding from Medi-Cal reductions and the funding for adult dental, mental health and other "optional benefits," as of last week centers receiving rural health system development grants, seasonal agricultural worker program funds and extended access to care grants will no longer be funded.

Ms. Frey said all clinics in the area have also been pressured by an increase of about 50 percent more uninsured patients, mostly from local businesses closing. Unlike more urban clinics that still have enough Medi-Cal patients to offset cost for uncompensated care, Mendocino has a relatively small number of people that qualify and for most it is less than 20 percent of their funding.

Once the clinic closes, people in that community will have to travel to Ukiah or Willits, more than half an hour away if they have transportation as the community does not have a bus line.

Also, the nearby the Anderson Valley Health Clinic, which also does not receive federal funding and is the only health care provider for about 3,100 people, lost about a fourth of its budget last week, or a third with earlier cuts to optional benefits, Medi-Cal and Healthy Families. Executive Director Judith Dolan said she has already implemented a 10 percent pay cut to her staff and is not sure what they will do now.

"At this point we are not throwing in the towel," Ms. Dolan said.

 "We are hoping that some how things turn around in enough time that we can make it, but the reality is half of our revenues are gone."