Shortfall to Force Drastic Cuts in County Transit Plan : Spending: Plunge in sales tax revenue will leave only the Red Line subway project unscathed, MTA chief says.

TIMES STAFF WRITERS

The county must dramatically scale back its 30-year transportation plan as a result of a projected $20-billion shortfall caused mainly by a sharp decline in sales tax revenues, the head of Metropolitan Transportation Authority said Friday.

An integral part of the ambitious, $183-billion plan is the $5.4-billion, 21.7-mile Metro Red Line subway. But that project--scheduled for completion in 2000--will not be affected by any belt-tightening because about half its funding comes from federal matching grants, MTA Chief Executive Officer Franklin White said at a specially scheduled board meeting.

"There can be no deviation from the Red Line timetable," White said. "We can look at other projects, but we are not going to be fooling with the Red Line."

But virtually every other transportation project in the county is a potential target as the transit agency faces an unprecedented shortfall of $550 million to $650 million in the next fiscal year, White said.

"The quicker this problem is identified, the better you are able to cope with it--the less drastic the measures you need to introduce," said White, who assumed his post this spring.

In hopes of balancing the books, transit officials expect to examine several options, including fare increases, slowing construction in the planned 400-mile rail program and adopting leaner operating budgets.

The plan, adopted in 1991, provides a framework for developing, managing and financing highway, bus and rail transportation into the third decade of the 21st Century.

White's announcement threatens to intensify the existing rivalry between rail proponents and bus passengers, who have bitterly protested that the bus system has been cannibalized to fund more costly rail systems. Buses serve 1.3 million, or 85%, of the county's transit riders.

"It is unacceptable to even consider raising bus fares," Lisa Hoyos of the Labor/Community Strategy Center said outside Friday's meeting. "Every time there is a fare increase, there is a substantial drop in ridership."

Hoyos and her grass-roots organization support a "comprehensive bus-centered system."

"For the same amount of money, you can provide so much more service (on buses)," she said.

Except for the Red Line, every big-ticket transit project will come under close scrutiny--a process likely to trigger heavy lobbying as politicians try to fend off major cuts or elimination of pet programs.

Projects such as the Blue Line extension to Pasadena and purchases of new buses will undoubtedly be considered, transit officials said. But no deals have been made and all programs will be evaluated fairly, officials said.

"There isn't a list that's in somebody's back pocket," MTA spokesman Jim Smart said.

But officials from several San Gabriel Valley communities lined up at Friday's meeting in hopes of keeping the Blue Line extension from winding up on anybody's hit list. They argued for maintaining the line to Pasadena as a high priority, insisting that they already have committed funds based on expectations that it would proceed on schedule.

The need to scale back transit plans is based on gloomy long-term projections of the county's economy prepared by the Business Forecasting Project at UCLA's Anderson Graduate School of Management.

That forecast said the 3-year-old recession is the deepest and longest of any economic downturn since the 1930s and will continue through this year. At best, the county can expect only a weak recovery beginning in 1994, the forecast said.

"The county's economy does not yet appear to be nearing a bottom," the report said. "In particular, the region is facing significant layoffs in government and defense over the next 12 to 18 months. Until these blows are absorbed, it will be difficult for the overall economy to turn upward."

Los Angeles City Councilman Marvin Braude, an MTA board member, cautioned Friday that although UCLA forecasters are "among the best, they too make errors--even on their quarterly projections."

He said he was concerned by the very grim view of Southern California presented in the report, saying that projections become less reliable as they consider longer periods. He asked the agency's staff to provide a description of the forecast's assumptions at the next board meeting.

"I want to show a positive view of what the future holds," he said. "What about new industries to replace aerospace?"

Friday's disclosure of a major shortfall calls into question the value of the 30-year plan, which was devised by White's predecessor, Neil Peterson. Some critics have long charged that the 30-year plan was never realistic--containing projects meant to placate and buy support from key political leaders.

"We were always assured that the money was there (for the 30-year plan)," Los Angeles City Councilman Richard Alatorre, MTA's chairman, said Friday. "The money is not there." He said the 30-year plan will need to be changed based on whether earlier projections were realistic.

Part of White's task in assuming his new job was to assess the 30-year plan. After conducting his analysis, White said that a plan that did not attempt to look as far ahead in the future would be more practical.

"Everybody knows you can't really plan on a 30-year period," he said. "More planners have died in failing to anticipate major changes that they had no way of anticipating. For purposes of revenue collection and construction planning, you have to use 10-year plans."

The 30-year blueprint includes a 10-year plan of transportation projects. If the MTA tried to carry out all the prescribed projects, the agency would face a $2.9-billion shortfall in 10 years, White said.

The MTA resulted from the April 1 merger of the county's two transit agencies--the Los Angeles County Transportation Commission and the Southern California Rapid Transit District.

In recent years, both agencies have faced shortfalls because of diminished revenues from the county's sales taxes. A decline in bus ridership also contributed to RTD's shortfall.

In the past, the two agencies bickered over money provided by local sales taxes, with each blaming the other for its budget woes.

Proposition C, approved by voters in 1990, added another half-cent, transit-related sales tax. Proposition C raises about $350 million each year that is earmarked for improving rail and bus service. The other surcharge, approved in 1980, financed the Blue Line trolley and part of the Red Line subway.

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