O.C. Officials Ambivalent About Federal Transit Plan : Legislation: Aid package offers more flexibility, but some think it is biased against bus and rail systems.

As Congress gears up for the first major overhaul of the 35-year-old federal aid program for the nation’s highway, bus and rail systems, Orange County officials are turning a wary and watchful eye toward Washington.

The Bush Administration has introduced landmark legislation that would alter dramatically the way the federal government hands out to the states billions of dollars generated by the federal gasoline tax to build, maintain and operate highways and mass transit networks.

The old federal aid system was put in place in the mid-1950s to pay for construction of the $122-billion, 42,500-mile system of federally funded interstate highways. With the interstate system all but complete, Congress and the White House are trying to design a new system that will meet the transportation needs of the nation into the 21st Century.

Many local and state officials, including staffers at the Orange County Transportation Commission, like parts of the Bush Administration bill. They endorse efforts to simplify and consolidate existing aid programs, and give states more flexibility to mix public and private funds and transfer money from one program to another.

“I think the general principle we favor is flexibility,” said James F. McConnell, Orange County’s Washington lobbyist. “That’s why this Administration proposal is being given a more serious reception. . . .”

But others are concerned that the Administration’s five-year, $105-billion plan will not provide enough money to properly maintain, much less expand, the national network of roads, bridges, buses and rails.

Some officials complain that the Bush plan would significantly increase the state and local share of the cost of highway and transit projects. And some argue that the plan is biased against bus and rail systems because it provides virtually no increase in transit aid over the next five years, while it includes a 27% increase in aid for highways and bridges.

“We like the idea of increased funding for highways, but we’re concerned that there should be equity for transit,” said Tom Fortune, manager of government relations for the Orange County Transportation Commission.

The Administration plan “is skewed in favor of highways rather than favoring mass transit,” agreed Rep. Ron Packard (R-Carlsbad), who represents southern Orange County. Packard and Rep. Christopher Cox (R-Newport Beach), who both serve on the House Public Works and Transportation Committee, will play key roles in shaping the transportation legislation that finally emerges from Congress.

Packard said he will push for more overall spending on transportation and for more equitable treatment for bus and rail systems. In addition, the congressman said he will seek funds to pay for building bridges or underpasses along the rail corridor from Los Angeles to San Diego, to increase both the speed and safety of train operations.

Cox, however, would like to scrap the Administration’s whole approach. In its place, he wants to see a system that leaves all but a small amount of gas tax revenue in the hands of the states to fund projects as they see fit. However, Capitol Hill aides say passage of that type of plan is considered very unlikely.

Leaders of the House Public Works Committee, which already has recommended spending 50% more than the Administration, are expected to have their version of the transportation bill on the House floor sometime in June, said an aide to Rep. Robert A. Roe (D-N.H.), the committee chairman.

Meanwhile, the three Senate committees that have jurisdiction over highway and transit programs are drafting their own bills. The bills that pass the House and Senate ultimately will be reconciled in a conference committee, and the final version of the bill must then be signed by the President.

Of particular concern to the Orange County Transit District is a provision in the Bush plan that would outlaw operating subsidies for any transit district in an area with a population of 1 million or more.

The district, which operates 678 buses and carries an estimated 48 million passengers annually, this year will receive about $8.8 million--8% of its operating budget--from the federal government. Cutting out that money would hurt, said Mary Evelyn Bryden, who until recently served as the district’s manager of government relations.

In addition, the federal government’s share of the cost of capital expenditures--largely buying new buses--would drop from 80% to 60%. “If we have to pay 40 cents on every dollar for the money to buy buses instead of 20 cents as we have in the past, that’s going to put a crimp in our style,” Bryden said.

But other provisions of the Bush plan would help Orange County. One would permit private companies operating high-speed trains to use highway rights of way at no cost, if the arrangement is approved by the state. That authority is critical to a plan to build and operate a magnetically levitated, 300-m.p.h. train between Anaheim and Las Vegas.

Officials of the California-Nevada Super Speed Train Commission, which last year awarded a preliminary contract for the privately financed, $5-billion project, have said that the plan cannot go forward unless the commission secures permission for the free use of the rights of way along Interstate 15 and other highways built with federal funds. Otherwise, the cost of acquiring land for the new rail system would be prohibitive, officials have said.

Another feature of the Bush plan that pleases Orange County officials is a special category to finance projects that would “help relieve congestion and transportation-related air-quality problems in large, urbanized areas.” The county might be able to attract federal money for such projects with funds generated by the additional one-half-cent sales tax approved by voters last year, officials said.

The Administration plan for the first time would permit federal aid to be mixed with private funds for construction of toll roads. But officials of the Orange County Transportation Corridor Agencies, which are building three of the five toll roads proposed for the county, would like to see even more in the bill.

The federal government should consider creating a revolving credit fund that could be used to temporarily finance debt payments for approved toll road projects whose revenue in the early years of operation falls below projections, said Wally Kreutzen, deputy director of finance and administration for the toll road agencies.

Creating such a fund would give much-needed encouragement to banks to finance toll road construction, Kreutzen said. After revenue increased, toll road agencies would repay the money, with interest, to the federal government, he said. Kreutzen said he already has discussed the idea with both Cox and Packard.

Although the transportation legislation that emerges from Congress will be based largely on the plan submitted by the Bush Administration, many of the key elements are certain to change, perhaps significantly, according to congressional staffers.

The Bush plan would shrink from six to three the basic federal aid programs for highways. It would create a 150,000-mile National Highway System, which would include the interstate highways, to be designated by states and the U.S. Department of Transportation.

The federal matching share for new construction or improvements on this system would be 75%, instead of the 90% match now provided for interstate highways. However, funding for remaining interstate projects would remain at 90%. Funding for the national highway program would rise from $7.7 billion in 1992 to $11.2 billion in 1996.

In addition, the Administration would create a second program for about 700,000 miles of secondary highways in urban and rural areas. The federal matching share under this program would be 60%. Funding would increase from $3.9 billion to $5.7 billion over the five-year period.

A third program would provide up to $2.8 billion by 1996 for repair and replacement of bridges, with a federal matching share of 75%.

On the transit side, the Administration plan consists of two major components--a formula program in which the federal matching share would be 60%, and a discretionary program in which the federal share would drop to 50%.

The Bush plan proposes virtually no increases in spending on transit projects. Spending would remain flat at $3.25 billion from 1992 through 1995, and then rise to $3.32 billion the following year.