Drop in Oil Price May Hurt Transit

Public transit systems and new transportation projects throughout California could lose as much as $110 million as the result of recent declines in the price of oil, Deukmejian Administration officials warned Thursday.

In Los Angeles County, the Southern California Rapid Transit District could lose about $12.8 million of its $493-million budget for regional bus service. Other municipal bus systems in Los Angeles County may lose about $2 million.

RTD spokesman Marc Littman estimated that it would take a fare increase of between 5 cents and 10 cents to make up for the loss or cutbacks in service that would remove about 50 buses from the RTD’s 2,000-bus fleet.

Los Angeles’ Metro Rail project could lose about $6 million, a small fraction of the $1.2-billion price tag of the downtown-San Fernando Valley line’s 4.4-mile first segment.

Growing Areas

Cuts also could affect bus subsidies throughout the state, safety improvements along the San Diego-Los Angeles Amtrak rail line and new transit projects in growing areas of Northern California.

Legislative sources cautioned that during state budget negotiations, lawmakers could make up part or all of the shortfall by borrowing money from other programs.

State Department of Finance officials, in their latest forecast of revenues, said tax receipts from the sale of gasoline had declined much more sharply than expected, endangering some projects and threatening cuts in others.

A spokesman for the state Department of Transportation said it will be at least a month before there is a clear indication of which projects might be affected.

On the federal level, the Senate also is considering a 20% reduction in transit subsidies, which could amount to an additional $10-million loss to the RTD.

Oversees Budget

Susanne Morgan, a Department of Finance budget officer who oversees the transportation budget, said the state cuts would reduce local transit budgets by about 3.5%.

Morgan said local transit systems can sustain the threatened reductions but conceded that “this is a healthy cut, there is no way around that.”

Last year, Gov. George Deukmejian signed a bill that requires the Administration to make up any shortfall in the mass transit fund. However, Morgan said the governor did not expect such a sharp drop as may occur and is balking at using other tax sources to overcome the deficit.

Deukmejian proposes to set aside more than $1 billion in the state budget for unforeseen emergencies. However, legislative sources said they expect a major fight over using some of that surplus to bail out transit programs.