New Era of U.S. Transit Aid Has County Worried : Funding: Local officials covet subway and rail money. Administration tabs highways for the biggest increases.

With the 35-year-old interstate highway system nearly finished and a deficit squeezing the budget, Congress is preparing to fundamentally rewrite federal transportation policy--and Los Angeles County, as the biggest beneficiary of funds in recent years, is scrambling to maintain its share.

At stake is nearly $500 million a year in federal aid to Los Angeles County for such programs as extending the Metro Red Line subway and subsidizing bus lines, as well as finishing freeways and building new busways and car-pool lanes to help relieve congestion.

Priorities outlined in the 1991 Surface Transportation Assistance Act will set the nation’s transit agenda for a generation, just as the 1956 version paved the way for three decades of freeway construction by authorizing the interstate highway system. Debate on the act is scheduled to start this week in the House.

For years, Los Angeles has done well in attracting federal support for all its transportation projects, partly because of its willingness to tax itself.

But local officials are worried about the Bush Administration’s reluctance to restore mass transit funds cut during the Reagan era, even as it proposes significant new funding for highways. This comes at a time when Los Angeles’ freeways are almost all built and the main priority here is mass transit.

The Administration also has said it wants to eliminate federal operating subsidies for big cities, a move that could cost the RTD $50 million a year and force it to reduce service, hike fares or divert money from train and trolley projects--or all three.

And the White House wants to stop paying for transit programs with general tax funds and rely solely on federal gas taxes and user fees in the highway trust fund while shifting costs to states and cities.

So to try to forestall the erosion of support for mass transit, the Los Angeles County Transportation Commission has been inviting Administration and congressional figures to Los Angeles for lobbying before the House begins debate on the transportation act. Those who have visited are U.S. Rep. Robert A. Roe (D-N.J.), chairman of the House Public Works and Transportation Committee, Sen. Daniel P. Moynihan (D-N.Y.), who heads a subcommittee of the Senate Environment and Public Works Committee, and several others.

On Friday the latest visitor, Secretary of Transportation Samuel K. Skinner, stood atop the unfinished Century Freeway near where a Metro Green Line light-rail station will be built and lauded Los Angeles for using local sales taxes to help pay for transit.

“People say, ‘The people won’t pay for it, that they want Washington to do it,’ ” Skinner said. “Whenever they say that, I just tell them to look at what’s happening here in Southern California.”

Voters in five Southern California counties--Los Angeles, Orange, San Diego, Riverside and San Bernardino--have approved sales tax surcharges during the last decade. These have generated hundreds of millions of dollars that give the region an advantage in competing for federal aid.

Other cities have sought grants to cover 60% or 75% of new transit systems. By offering to pay for half of its Metro subway and all of its light-rail trolleys, Los Angeles has seen its federal mass transit construction aid grow to $150 million this year--more than twice the amount given any other city and fully one-third of all federal “new start” mass transit funds.

“Los Angeles is the perfect example of what will soon be happening nationwide,” said Neil Peterson, executive director of the Los Angeles County Transportation Commission. “The freeway system is basically built out and now we’re turning our attention to other ways to move people around. We’re doing more than anyone else--and we are doing it now.”

However, substantial federal aid will be needed when Los Angeles County sets out to expand its costly Red Line subway into the San Fernando Valley and extend the Orange Line subway under Wilshire Boulevard to Santa Monica and east toward Norwalk.

Considerable federal aid also will be needed for realizing the county’s ambitious goal of building 400 miles of busways and car-pool lanes and for improving commuter rail lines to eliminate grade crossings that intersect surface streets.

Altogether, local officials hope to receive $10 billion in federal aid for transit projects during the next three decades, and that much again for busways, car-pool lanes and other highway improvements.

At least for the next year, Los Angeles seems assured of staying on top of the heap in attracting federal money. The White House has proposed that Los Angeles receive two-thirds of all federal mass transit construction funds--$188 million, enough to finish the second leg of the Metro Red Line, between Lafayette Park and Hollywood.

But the long-range allotment of money is what has officials concerned. The Administration’s fondness for freeways, even after the 44,000-mile interstate system is finished, puzzles local officials who hope Congress will remake the Administration’s proposal, which would increase highway funding by 40% over the five-year life of the bill while limiting mass transit to a 2% increase. They want to emphasize urban mass-transit programs for the next 30 years.

The preference for mass transit is important because, as county Transportation Commission staff has noted, the budget deficit will make money extremely tight for a long time. If Congress cannot persuade the White House to shift money to transit from highways, the money will have to be found somewhere else--a discouraging prospect.

As a commission report warned, “It will be difficult, if not impossible, for Congress to substantially increase transit spending without affecting other hard-pressed domestic programs.”

Of equal concern are Administration moves to eliminate operating subsidies, dipping into the highway trust fund instead of the general fund, and shifting more and more cost to states and cities.

Peterson and other local transit officials note that current spending would deplete the trust fund in five years, and getting general fund money restored would be unlikely at best. Local officials plan to vigorously oppose that proposal as well as the reduction of operating subsidies to big cities.

“There would be roughly $1 billion in annual gas tax revenue to finance a $3.3-billion (transit) program,” a county Transportation Commission analysis concluded.

Los Angeles transit officials are pleased by some parts of the White House proposal beyond the support for the Metro Red Line. For example, they favor the idea of letting states and cities be flexible in how to spend federal aid--by using highway funds for transit projects when necessary and transit funds for highways. Such fund-mixing is currently illegal.

That is a key element of the county’s agenda as debate on the bill opens. Among its other goals for Congress:

* Release $188 million to complete construction of the Metro Red Line from Lafayette Park to Hollywood.

* Authorize expansion of the Metro Red Line from Hollywood to North Hollywood and extension of the Metro Orange Line from downtown to East Los Angeles.

* Reform federal rules that let the federal government pay up to 90% of the cost of highway construction but as little as 50% of the cost of subways and other mass-transit facilities.

* Instruct state governments, which administer highway construction funds, to give priority to busways and car-pool lanes instead of simply widening roads.

* Equalize spending on highways and mass-transit projects.

* Increase the federal gas tax to discourage driving and make more money available for mass-transit projects.

Despite some basic philosophical differences about the future of federal transportation aid, Skinner, who once served as chairman of the Regional Transportation Authority of Northeastern Illinois, was enthusiastic about the region’s ambitious transit plans.

“There is not a better project in the country to illustrate what we are trying to do in the new bill,” he said after looking over the partially completed Century Freeway, which combines conventional freeway lanes with separate busway and car-pool lanes and the Green Line light-rail system.

“The freeway is federally funded along with the state, and the Green Line is being built entirely with state and local funds,” he said. “It’s an absolutely perfect project.”

Local officials hope to parlay that enthusiasm into bankable support.

THE FEDERAL HAND IN FUNDING L.A. TRANSIT

Federal Grants

In 1991, Congress distributed $440 million in grants for studying the feasibility of designing and building new rail rapid-transit systems. Los Angeles is using its $150 million only for the heavy-rail Red Line subway; it matched the federal funds with another $150 million from local sources, chiefly the 1% sales-tax surcharge.

City (Percentage of grants): Total

Los Angeles (34.1%): $150 million

St. Louis (13.6%): $60 million

San Francisco (9.1%): $40 million

Houston (7.3%): $32 million

Atlanta (6.8%): $30 million

Dallas (4.5%): $20 million

Hudson Waterfront (4.5%): $20 million

Denver (4.0%): $17.6 million

Chicago (3.6%): $16 million

Jacksonville (3.2%): $14 million

Miami (2.7%): $12 million

Honolulu (2.5%): $11 million

Cleveland (1.1%): $5 million

Salt Lake City (1.1%): $5 million

Baltimore (1.1%): $5 million

Chattanooga (0.2%): $1 million

Portland (0.2%): $1 million

San Diego (0.1%): $400,000

Federal Transit Aid

Here are the L.A. County transportation programs receiving federal assistance in fiscal year 1991. Proposed changes in federal policy could shift a greater percentage of costs to the local government:

Highway Construction

* Interstate completion, car pool lanes: Total budget $310 million

Local cost: 30%

Federal assistance: 70%

Transit Construction

* Metro Rail Red Line: Total budget $300 million

Local cost: 50%

Federal assistance: 50%

* All other train lines: Total budget $685 million

Local cost: 100%

Transit Operation

Rapid Transit District and Municipal Operators*: Total budget $732 million

Local cost: 93.5%

Federal assistance: 6.5%

* Municipal Operators: Long Beach Transit, Santa Monica Municipal Bus Line, Montebello Municipal Bus Line and smaller city-owned bus services in Gardena, Culver City, Norwalk, Arcadia, Commerce, La Mirada and Claremont.