10.6% Budget Hike Sought for LACTC : Transportation: Two-thirds of spending would go for rail services, including three Metrolink commuter lines and Red Line subway.

Despite anemic revenues from its recession-battered sales-tax surcharges, the Los Angeles County Transportation Commission staff proposed Wednesday to increase its budget by 10.6%, to $1.68 billion, for the fiscal year starting July 1.

The LACTC budget, which would exceed that of several states, proposes to keep the agency’s ambitious rail-construction program on track, but recommends cutting back on often-criticized administrative expenses.

Nearly two-thirds of the total, for example, would be spent on new rail services, including three Metrolink commuter-rail lines slated to start in October and the Metro Red Line subway, which is scheduled to begin service next January. The rest would be spent on buses and highway improvements.

Left unresolved is how the county commission can help the Southern California Rapid Transit District cope with a projected $135-million deficit next year. That will not be resolved until the LACTC decides exactly how to spend $346 million in sales-tax revenues made available after the state Supreme Court last week upheld a half-cent sales tax approved by voters in 1990.

The budget must be approved by the full County Transportation Commission.

In light of the pending merger of the LACTC and RTD--legislation to combine them into a new Metropolitan Transportation Authority was signed Tuesday by Gov. Pete Wilson--some LACTC board members challenged Executive Director Neil Peterson’s proposal to immediately hire another 23 people.

Board members Gerry Hertzberg and James Tolbert, among others, questioned the wisdom of hiring new workers now, knowing that the merger could result in the layoff of some experienced employees within a year.

The LACTC is authorized to employ 520 people; the RTD employs about 9,000 people, including 4,700 bus drivers, 1,800 mechanics and 1,500 administrative personnel.

“In light of the pending merger, I would think we’d encourage attrition,” said Marvin L. Holen, an LACTC board member who also is president of the RTD Board of Directors.

However, board members Ray Grabinski and Jacki Bacharach said that the merged agency might not necessarily require fewer employees.

Of the $1.68-billion budget, the LACTC proposes to spend more than $1 billion, or 63.4% of the total, building or designing new train lines, including the Norwalk-to-El Segundo Green Line and a Blue Line extension to Pasadena as well as Metrolink and the Red Line.

State bond money approved by voters in 1990 accounts for the growth in this category, which helped the overall budget grow despite lower-than-expected sales-tax revenues.

About $221 million, or 13.1%, would be spent subsidizing existing bus services, while $74 million, or 4.4%, would go to subsidize operation of the Blue and Red lines.

The remaining $321 million, nearly one-fifth of the budget, would pay for other programs.