Measure Ties State Funding to Salaries of Transit Officials

A little-noticed bill on Gov. Pete Wilson’s desk threatens to slash the pay of California’s highest-compensated local transit officials by thousands of dollars a year.

If signed into law within the next few days, the legislation will force the Los Angeles County Metropolitan Transportation Authority, among others, to make a choice:

Either cut the compensation of agency executives who make more than $135,712 annually or forfeit all funding from the state government, about $618 million, or 17% of the MTA’s 1993 budget. The bill is opposed by the MTA, the Orange County Transportation Authority and other agencies.

“It has all these transit agencies squealing like stuck pigs,” said the bill’s author, Sen. Quentin Kopp (I-San Francisco). “We preach fiscal conservatism, and that’s what we ought to practice.”

Kopp’s measure would require local transit agencies, as a condition of receiving state funding, to reduce executives’ compensation to a level no more than 30% above that received by the director of the California Department of Transportation. As defined by Kopp, chairman of the Senate Transportation Committee, the bill would set the top compensation for local transit officials at $135,712.

In Los Angeles, as many as 10 officials of the MTA could be affected by Kopp’s bill, according to interviews and compensation records obtained by The Times. Those officials include newly hired Chief Executive Officer Franklin E. White, whose total annual compensation is $212,365; Edward McSpedon, president of the MTA’s rail construction subsidiary, whose compensation is $165,321 yearly, and Alan F. Pegg, executive officer of administration, $154,081. Overall, 40 MTA employees have salaries exceeding $100,000.

Of the top 10 MTA officials, the impact could be greatest for White, who last spring left his position as transportation commissioner for the state of New York to take the job in Los Angeles. The irony is that Kopp agreed at that time to amend his bill in an effort to accommodate the MTA’s hiring of White.

Kopp’s bill, passed by both houses of the Legislature, exempts officials whose employment contracts are dated before May 1, 1993. But although White began working at the MTA in April, negotiations over his complex contract dragged for months and the document was not completed until June--more than one month after the legislation’s cutoff.

Officials at the MTA pointed out that the agency sent White a letter in February agreeing to hire him. Kopp, however, said Monday that the date of White’s contract means that the transit executive would not be exempt from the legislation.

If MTA lawyers seek to exempt White from the compensation cap of the legislation, Kopp said, “I’ll file a lawsuit, as a taxpayer, to stop it.” Kopp, a lawyer, termed a “sickening spectacle” the salary levels and housing loans and incentives offered to officials of the MTA and to those of other transit agencies in California, including the Bay Area Rapid Transit District.

White did not return calls seeking his comment on the legislation.

Jan Dana, a spokeswoman for Wilson, said the governor, who makes $114,000 a year, has not yet decided whether to sign the bill. He has until midnight Monday to act.

Edward R. Gerber, lobbyist for the California Transit Assn., estimated that about 30 transit officials statewide would be affected if Kopp’s measure is signed into law. The organization opposes the bill.

In an interview, Gerber said that local transit agencies typically receive between 5% and 8% of their budgets from the state, with the remainder coming from federal sources and locally imposed taxes.

“We don’t think the party paying that (small a) percentage ought to be calling the tune,” Gerber said.

At a time of tightening state and federal budgets, Kopp and other proponents of the bill say that the compensation of local transit officials has grown disproportionately. The director of Caltrans, Kopp noted, is paid a salary of $95,804, plus benefits, and manages 19,000 employees and a budget of $6 billion. The Caltrans director and Wilson have accepted 5% voluntary pay cuts.

“Whenever we talk about belt-tightening,” Kopp wrote in a letter in February, “these (local) officials offer to reduce service but never offer to reduce their own compensation rates to be consistent with their responsibilities.”

The MTA’s Pegg, who has been assigned to evaluate the legislation’s potential impact, said in an interview that it would be up to the agency’s appointed commissioners to decide how to respond if Wilson signs the bill into law.

Stephanie Brady, a spokeswoman for the MTA, said that, other than declaring its opposition early this year, the agency is not lobbying the governor’s office to veto Kopp’s bill.

Others, including the Orange County transit agency, are urging a veto. In a letter to Wilson two weeks ago, agency Chairman Gary L. Hausdorfer said the bill would improperly erode local control.

“In subsequent years, other special districts or county and city government executives will likely be the targets,” Hausdorfer wrote.

Willman reported from Los Angeles, Gladstone from Sacramento. Times staff writer Jeffrey A. Perlman contributed from Orange County.