Reagan Budget Called Threat to Financing of Metro Rail

President Reagan’s fiscal 1987 budget will propose a severe cutback in federal money available for road, bridge and transit projects and, if enacted, could seriously disrupt financing for the fledgling Los Angeles Metro Rail project, according to congressional sources.

The budget, to be released Wednesday, will consolidate a variety of separate federal highway and transit aid programs into two major block grants, both of which would be financed at levels well below current appropriations, sources said.

It would also prohibit transit systems in large cities such as Los Angeles or San Diego from using federal transit money to underwrite operating costs, a policy the Reagan Administration has long advocated but Congress has consistently thwarted.

“That will be bone-crushing to our transit systems,” said Jayne Kirkpatrick, a spokeswoman for the American Public Transit Assn. She noted that some large systems pay for half their operations with federal subsidies. In its current operating year, the Southern California Rapid Transit District expects to receive $47.5 million in federal operating subsidies, nearly 10% of the Los Angeles-area system’s operating budget.

Past Efforts Rejected

In a telephone interview, RTD Board President Nikolas Patsaouras noted that Congress had rejected past Administration attempts to eliminate financing for new transit projects.

“I’m concerned, but I’m not alarmed,” he said. “. . . There will be cuts, and what he (Reagan) may be able to do is stretch the construction schedule of the (Metro Rail) project out, but I’m convinced he will not be able to stop it.”

Under the Administration budget proposals, according to the sources, one of the omnibus grants would earmark $7.8 billion for construction and rehabilitation of interstate highways and primary roads across the country, down from the current $9.5-billion spending level for the same programs.

Another $3.4-billion grant would lump transit construction and subsidies with several road and bridge repair programs that altogether are receiving $5.7 billion in financing in fiscal 1986.

The arrangement would enhance state flexibility in distributing the funds they get, but it would also make changes in the money mix that would disproportionately reduce funds available to some larger states, sources said.

“Not only is the pie smaller, but they get a smaller piece of the pie,” said one congressional source in describing the impact on California.

While the changes would not automatically hit Metro Rail, the source predicted that they would increase pressure on state officials not to allocate their dwindling resources to a construction project that has yet to get under way. Congress late last year authorized $101 million in start-up money for Metro Rail, a figure that will be chopped by more than $4 million next month by the new Gramm-Rudman deficit-reduction law.

Armed with that money, RTD officials have expressed hope that they could break ground next month for the initial four-mile leg of the proposed downtown-to-San Fernando Valley system. However, the digging schedule hinges on approval of a federal and local cost-sharing pact by the Reagan Administration, which has vigorously opposed the project.

Patsaouras said he is not opposed in principle to Reagan’s plans to do away with operating subsidies, but the RTD chief said it is a change that the system could absorb only gradually. He said the system could get by next year with a $2-million to $3-million cut in its current subsidy level.

“In my opinion, that’s a welcome direction,” Patsaouras said of the move to eliminate subsidies. “In Southern California we have started to look into privatization (of transit services) . . . . The cuts will speed that process up.”

Under another change Reagan will propose, California could lose a significant share of highway money under a program designed to ensure that states get back in federal road aid a significant part of the road tax money they send to Washington.

In fiscal 1986, California is scheduled to receive $119 million of about $600 million to be distributed under the program. The Reagan proposal would limit that program in fiscal 1987 to $250 million, a reduction that would cut California’s share by more than half.