Demise of California Arts Council feared imminent.

The 27-year-old agency is best known for its grants to local organizations, and much of the funding is used to send artists and performers into public schools. In the fiscal year that ended Monday, the Arts Council spent almost its entire budget of $18.2 million on grants.

The proposed state budget would slash the budget to $750,000, "which we interpret as the cost to shutter the agency," said Arts Council spokesman Adam Gottlieb. An Assembly "trailer" bill to the budget proposal would abolish the Arts Council and its grants program completely. With the deadline passed, the budget remains in limbo.