By Rita Felciano

THE YEAR'S LAST dance premiere proved to be a stunner. Presenting a new Nutcracker for the first time in almost two decades, San Francisco Ballet artistic director Helgi Tomasson has done what might seem nearly impossible: allowed us to hear well-known music in a new way, recast an old story in fresh yet familiar terms, and wrapped the whole package in flourishes of humor and sentiment. Gone is the ballet's saccharine sweetness, the Victorian context, the disjointed narrative. Set in pre-World War I San Francisco, Tomasson's production is elegant, refined, and suffused with light filtered through fog. The choreography doesn't break any ground, but its balance between tradition and innovation is enchanting.

That's something of a relief: scheduled to play through the end of the year, the show reportedly cost $3.5 million, which some might call a lot of money for a single work, however good. Was it worth it? Or to rephrase the question, can it be justified at a time when arts funding is going down the drain and worse cuts are creeping onto the horizon?

Many local dance lovers will respond with an adamant negative. However, it might help to remember that this Nutcracker isn't a one-shot deal. It's an investment in the future of ballet and, by implication, dance in San Francisco at a time when all the arts – and dance in particular, because it's economically the weakest – are in danger of sinking below the radar.

Unlike other repertory pieces that come and go, Nutcracker is a staple, and the presence of SFB's has a ripple effect on the smaller ballet companies whose survival depends on their own annual Nutcracker cash cow. What's more, SFB's previous Nutcracker dated back to 1986. If Tomasson's new one lasts as long (perhaps even beyond his tenure at SFB), it will be more than "amortized" – if by nobody else than the 2,000 children who get to see the performance for free each year. (This year it's 6,000, owing to a special grant SFB received.)

Meanwhile, in other quarters financial – dispiriting and otherwise – the hotel tax-supported Grants for the Arts maintained its funding level, a total of $1,427,000 that was awarded to 29 ensembles. Regrettably, only one of the grantees – the Chitresh Das Dance Company – is a first-time recipient; still, these days putting even a modest bottom under dancing feet is no small thing.

The San Francisco Arts Commission's four-part grant program awarded a total of $443,775 in the areas of Art in Public Places, Individual Grants, Creative Space, and Cultural Equity. While a breakdown wasn't available at press time, a major portion of that money goes for Cultural Equity grants supporting projects by artists from underrepresented populations.

What will happen to these local funding agencies if the proposed budget cuts go through in January? It's anyone's guess.

On a national level, of 70 National Endowment for the Arts grants and a total of $1.7 million granted to Bay Area groups, nine dance ensembles received $185,000, mostly in the $10,000 range. That's a pitiful record – and yet it's better than the state of California's, whose support this year was zilch. State support of the arts here is now lower than anywhere else in the Union.

Looking back, then, one realizes how much good – or at least intriguingly fresh – dance was created by artists who work for minimum wage, late at night after they've left their day jobs. Of course, we saw impressive premieres by major choreographers: Paul Taylor's Dante Variations, Mark Morris's Sylvia and Rock of Ages, and Christopher Wheeldon's Rush. But this year in particular demonstrated how much the Bay Area depends on the vitality of its local arts scene.

Unexpected delights: in January an afternoon studio performance at UC Berkeley by the Palucca School from Dresden threw open the windows to German dance in the '30s. To experience good performances of works by choreographers like Mary Wigman, Harald Kreutzberg, and Gret Palucca, whose name our grandparents might remember but whose work we've likely never seen, was pure pleasure.

Noh Space, which usually programs contemporary Asian dance, in April gave us "East Wind," a program of geisha, Kabuki, and Okinawan dance curated by Yuki Fujima. Exquisitely performed by artists living and working both here and in Japan, these traditional solos, demonstrating widely divergent forms of Japanese dance, enchanted with their elegance, discipline, and emotional power. One wonders why these dancers aren't performing in larger venues.

In May visual designer-producer Doug Baird presented an evening of local dance in St. Aidan's Episcopal Church in Diamond Heights, emptying the sanctuary and seating people in the round. Intelligently chosen, small-scale pieces by choreographers like Amy Seiwert, Scott Wells, Stephen Pelton, and Sara Shelton Mann were presented to what was probably a completely new audience – a great way to fill an underused neighborhood space.

One of the biggest surprises, though, came in a well-known venue, ODC Theater, where new advocacy group Choreographers in Action launched National Dance Week in April with an updated version of the "Minute Waltz": 24 two-minute excerpts of local choreographers' works. It sounded like a ghastly idea, but in fact "24 Views" was great fun, a smartly programmed and tightly scheduled hour and a half of tidbits that offered flashbacks of older work and glimpses at pieces yet to see the light of day.

What do grammarians and a fashion magazine editor have in common? Hagen and Simone's witty and spiffily paced Future Perfect, performed in August at ODC, proved that imaginative artists can yank the most unlikely subjects together. More of a cabaret act than a dance piece, Future Perfect succinctly explored image making, fashion, and identity with humor and, yes, style.

Memorable impressions: two very quiet pieces at Yerba Buena Center for the Arts left two of the deepest imprints this year. In February, Joanna Haigood's meditation on the physicality of memory, Ghost Architecture, went by almost unnoticed. Yet the piece, a tribute to the ordinary folks who once inhabited the SROs where the center now stands, filled the Forum's modernist lines with pure poetry. A rotating group of dancers seemingly slipped into the lives of unknown people, delineating their pains, aspirations, and modes of survival. Glimpses of contemporary life delivered by way of outside noises and the brilliant use of a camera obscura tied together the fate of then and now.

In May, June Watanabe's "Noh Project II: 'Can't' Is 'Night' " assembled some extraordinary artists – Pauline Oliveros's Deep Listening Ensemble, Noh master Anshin Uchida, poet Leslie Scalapino – to join her in her retirement performance. To watch the latter, modest but sure of herself, hold her own against a giant like Uchida was to witness the pulling together of extraordinarily opposed views of life and art. Watanabe may be retired, but with the longest, deepest arabesque of her life, she carved herself permanently into our memory.

Also at Yerba Buena Center in February, Deborah Vaughan's Dimensions Dance Theater celebrated its 30th anniversary with Vaughan's two-hour Streams of Legacy, for which she incorporated strands of Cuban and Zimbabwean elements into her modern-African vocabulary. Repeatedly, eight female dancers managed to transcend clock time to move us into a place both mythical and absolutely contemporary.

And lastly, in November, the Chitresh Das Dance Company celebrated its choreographer's 60th birthday with the wholly enchanting Sampurnam, an evening in which distinctions between professionals and students became nearly irrelevant – such was the skill, dedication, and poetry manifested by these dancers. One had the sense that, from the master on down, these performers were there because they couldn't help themselves. They just had to dance.