Legislators, Wilson Seek 50% of Revenues From State’s Ports to Help Balance Budget

Gov. Pete Wilson and legislators are seeking to tap profits generated by the state’s major ports, including Los Angeles and Long Beach, to help balance the state budget--revenues that could reach $90 million a year.

A joint Assembly-Senate budget conference committee agreed Tuesday to funnel 50% of the ports’ net revenues, traditionally used to build piers and terminals, into the state’s general fund.

Cynthia Katz, assistant director of the Department of Finance, acknowledged that Wilson has embraced the revenue-sharing proposal, saying “the state should receive part of the profits” in part because the ports have developed into thriving businesses on state tidelands.

But port officials condemned the move as a power grab that ignores their long-term needs, maintaining that it could delay expansion, hurt the prospects for thousands of new jobs and make California ports less competitive. Besides Los Angeles and Long Beach, the proposal would affect the ports of San Diego, Oakland and San Francisco.

At issue is whether port profits should be poured back into harbor projects or whether the money should be used for such other vital purposes as education and prisons, said Alan Lind, a consultant to the Assembly Ways and Means Committee. Lind estimated that revenues from California ports could be as much as $90 million a year.

Assemblyman Thomas M. Hannigan (D-Fairfield), a member of the budget conference committee, said that the ports “have excess revenues” and “unlike other occupants of state lands pay no compensation to the state.”

However, Steve Dillenbeck, executive director of the Port of Long Beach, said the proposal is “very, very shortsighted.” He said that under the proposal Long Beach could lose up to $35 million a year--money that would otherwise be used for new piers and other projects to attract shipping tenants.

He said the Legislature set up the port 80 years ago “to be self-sustaining and not to be a drag on the taxpayers.” Now, he said, “they want to cut our legs off.”

Julia Nagano, a spokeswoman for the Port of Los Angeles, voiced a similar complaint, saying the legislative proposal “could prove to be devastating because of the long-range ramifications.” She estimated that the Port of Los Angeles could lose as much as $40 million annually.

Some port officials worry that if the proposal is enacted it would undermine their ability to finance improvements. They cited a warning issued last week by Standard & Poor’s, which rates port bonds, that said the proposal “could significantly limit the ports’ financial flexibility and the ability to generate appropriate reserves for financing capital programs.” Among the projects that could be affected is a proposed $500-million transportation corridor between the ports of Los Angeles and Long Beach and downtown Los Angeles.

Despite the conference committee’s action, the prospects for the revenue-sharing proposal are unclear. Assembly Speaker Willie Brown last week stripped a similar proposal from another bill, but on Monday the San Francisco Democrat left open the possibility that it would be included in a final budget compromise.

E.A. Melendez, a lobbyist for the Port of Long Beach, said the opponents have a harder fight now that the Wilson Administration has joined some lawmakers in supporting port revenue sharing. “It makes our job a little more difficult,” he said.

Times staff writer Greg Krikorian contributed to this story.