Funding Ideas for Rail Line Sought : Transportation: Shrinking tax revenues threaten the proposed and long-awaited east-west Valley service.

Faced with tax revenue shortfalls that cast doubt on the future of a long-awaited rail line in the San Fernando Valley, Los Angeles County transportation officials scrambled Wednesday to find new money sources or cost-cutting ideas to keep the project on schedule.

Metropolitan Transportation Authority officials disclosed this week that no money is in sight for the proposed east-west Valley line for at least 10 years because of shrinking tax dollars.

Previous plans called for construction of the much-debated line to commence in late 1995 and passenger service to begin in 2001. But because of the budget shortfalls, transportation officials say it is unlikely that the line will be able to meet that schedule unless new transportation dollars are found soon.

At a budget meeting Wednesday to discuss ways of closing a $258-million shortfall in the authority’s $3.4-billion annual budget, MTA General Manager Franklin White instructed his staff to come up with alternative funding ideas for the Valley line and return to the MTA board in August with recommendations.

MTA managers who oversee transit projects in the Valley said it was too early to say where or how they would find the dollars to keep the project on schedule. Although federal grants are a likely source, some MTA officials fear the federal government may balk, saying it has already provided more than $1 billion for construction of the Metro Red Line subway.

“We have to wait to see how all this falls into place,” said Judy Schwartz, a member of the MTA’s Valley area team.

Problems for the Valley line arose this week as MTA members discovered that shrinking tax revenues would not allow the authority to fund an ambitious 30-year construction schedule for a 400-mile regional rail network.

Los Angeles County voters approved half-cent sales tax increases, one in 1980 and one in 1990, to raise an anticipated $800 million annually for mass transit projects. But because of the recession, the tax increases have generated only about $750 million annually.

The drop in tax revenues reduces the MTA’s ability to provide matching funds needed to qualify for certain federal and state grants. The diminishing revenue stream also reduces the MTA’s ability to issue bonds.

On the MTA’s priority list, the east-west Valley line falls below the Red Line subway from downtown Los Angeles to North Hollywood, the Green Line between Norwalk and El Segundo and the Blue Line between Pasadena and downtown Los Angeles.

As proposed, a Valley line would cost $2.24 billion for a 16-mile elevated rail line over the Ventura Freeway from Universal City to Woodland Hills or $2.79 billion for a 14-mile, mostly subway line between North Hollywood and Woodland Hills.

Both would connect to the Metro Red Line subway. The decision between the two routes--the subject of a bitter controversy for several years--is expected to be made sometime early next year.

To save money and bring the east-west line back on schedule, MTA member Nick Patsaouras suggested Wednesday that the authority build the less-expensive elevated line and eliminate the Red Line subway extension from Universal City to North Hollywood, which he called the “one-billion-dollar dogleg.”

County Supervisor Mike Antonovich, an MTA member who has long backed a proposed monorail over the Ventura Freeway, said the budget shortfall is due, in part, to billions of dollars spent so far on the Red Line subway.

“The problem is that the Red Line has gobbled up money like a fat lady eats chocolates,” he said.

He said the funding problem only reinforces his position that the MTA should stop funding expensive subway lines and look to projects like his monorail idea.

Despite the financial problems, Antonovich said he is optimistic that the MTA staff will find funding for the Valley line soon enough to ensure passenger service by 2001.

In other action, the MTA failed to reach decisions on its first budget by its Wednesday deadline, putting off painful choices requiring the juggling of big-ticket rail projects with diminished funds.

The MTA--created to cut spending and streamline bureaucracy--missed the deadline for approving its proposed $3.4-billion budget because the newly appointed board could not agree how to spend its money and make up for the $258-million shortfall.

Board members instead adopted a special one-month budget that allows for bus and rail service to continue at their current levels.

“We are going to have to make some difficult decisions,” said Los Angeles City Councilman Richard Alatorre, the MTA chairman. “The solutions are not going to be easy, and it’s going to take creativity.”

The board also postponed until the end of the month a decision on a $205-million contract for building 72 Green Line rail cars, and selected a six-mile route and seven subway locations for the Red Line subway extension into East Los Angeles, slated to open in the year 2000.

In January, transit officials unveiled the first segment of what is designed to be a $5.4-billion, 21.7-mile subway. This line now runs between Union Station and MacArthur Park. The next segment, a 6.7-mile leg, runs through the Mid-Wilshire district, and is scheduled to open in two stages, in 1996 and 1998.