Gov. Kathleen Sebelius’ proposed cuts to the state’s budget would create at least a $1 million shortfall in the city’s already approved 2009 budget, city leaders estimated Tuesday evening.

City Manager David Corliss said he’s most concerned about the governor’s proposal to withhold from the city all tax collections made on liquor sales at bars and restaurants.

“That has been a steady and many cases growing source of revenue for the city,” Corliss said.

The city is estimated to receive about $1.7 million in liquor taxes in 2009. Under the governor’s plan, the city would receive none of the taxes after July 1 — the start of the state’s fiscal year. Corliss estimates that would cost the city about $850,000 in tax revenue in 2009.

The liquor tax money is used to fund the city’s swimming pool operations, police officers who serve as school resource officers, and a variety of social service programs that deal with youths and the prevention of drug and alcohol abuse.

Corliss is estimating another $250,000 would be lost under Sebelius’ proposal to eliminate a special state payment meant to compensate local governments for the recent elimination of taxes on business equipment and machinery. Some of that money goes to support the Lawrence Public Library.

Douglas County Administrator Craig Weinaug said he’s worried about secondary impacts from the proposed cuts. He said state cuts to social service agencies could make it more likely that those agencies will turn to local governments for help.

But Weinaug said the state budget news did not catch him by surprise.

“With the kind of crisis the state is in, it is inevitable that they would have to look at these sort of things,” Weinaug said.

City commissioners at their Tuesday evening meeting vowed to follow the budget process closely, and start working on a “worst-case scenario” of how the city would address any budget shortfall.