San Diego Trolley Funds Derailed : Reagan Snuffs Out $11.3 Million Expected for East Line

In what could be a serious setback for the San Diego Trolley’s eastern extension, the Reagan Administration has notified Congress that it does not intend to distribute millions of dollars already allocated for the railway.

In all, the Administration said it does not intend to spend $223 million allocated during the last two years for mass transit projects in five cities, including San Diego, Los Angeles, St. Louis, Miami and Jacksonville, Fla.

For the San Diego project, this decision means deferral of $11.3 million approved for the San Diego Trolley in 1984 and 1985. San Diego officials have tried desperately to secure $40 million in federal money needed to help pay for the $83-million, 4.5-mile eastward extension, which is already under construction.

The Metropolitan Transit Development Board (MTDB) hopes to have the East Line operating in 1986, and trolley cars that were ordered from Europe for the line were being assembled in San Diego Wednesday morning.

While the Administration’s move adds obstacles to obtaining the funds, many predicted that Congress would override the action within several weeks.

Trolley officials said they were not surprised by the Administration’s decision and said they “were pinning their hopes” for eventual approval of federal funds on Congress.

“The Administration since January has made it very clear it did not want to fund any new projects,” said Tom Larwin, general manager of the MTDB, which oversees the project. “Even though our project is an extension, we were expecting that from the Administration.”

He said Congress, especially Rep. Bill Lowery (R-San Diego), has been “supportive” of the San Diego project and of allocating federal money.

The Administration’s action, which also affects $129 million in funds earmarked for Los Angeles, has dealt a serious blow to that city’s Metro Rail subway project. That money is part of $429 million in federal funds needed by the Southern California Rapid Transit District to build the first $1.2- billion, 4.4-mile section of subway from Union Station to Alvarado Street.

The deferral notice, contained in a letter sent to congressional leaders last week by the Office of Management and Budget, is the latest effort by the executive branch to prevent new rail projects from getting started. Administration officials have said that, because of the federal deficit and uncertainties about future transit financing, the government should not start major new rail programs it may not be able to finish.

Administration officials were not available for comment Wednesday, but Ralph Stanley, administrator of Urban Mass Transportation Administration (UMTA), said in an earlier interview that deferring funds was among several tactics he might attempt to hold up the new mass transit projects.

The House last month approved a 1986 transportation bill that included language ordering UMTA to distribute the withheld funds. And the Republican-controlled Senate Appropriations Committee last week approved its version of the transportation bill, adding language calling for the money to be disbursed.

The full Senate still must act on the measure and then a joint conference committee will resolve differences in the two bills--probably next month.

Times staff writer Rich Connell contributed to this story.