NEWS ANALYSIS : Hard Road Ahead for the MTA : Transit: Potential budget cuts, several lawsuits and a proposed state overhaul of its organization are among the agency’s challenges.

Given its travails, the abbreviation might as well stand for Much Troubled Agency.

The Metropolitan Transportation Authority is under assault, facing a wide range of financial, legal and political problems that could dramatically alter plans for new rail lines and profoundly affect bus service.

In fact, the next few months could leave transit officials yearning for the summer doldrums.

* In Washington, the Republican-controlled Congress is considering budget cuts that local officials warn could force bus fare up another quarter, to $1.60, and slow construction of subway lines to the Eastside, the Westside and the San Fernando Valley.

* In Sacramento, legislators are moving to overhaul the transit agency once again, this time by creating an elected Metropolitan Transportation Authority board.

* In the courts, trial is scheduled to begin later this year on a nationally watched lawsuit accusing the MTA of discriminating against minority and poor bus riders by funding rail projects that largely benefit more affluent, white commuters.

* One of the transit unions has obtained a court order temporarily blocking the financially strapped MTA from laying off nearly 100 mechanics and bus maintenance workers.

* More than 500 property owners have signed on to a lawsuit alleging more than $1 billion in damages from subway construction in Hollywood.

The suit alleges violations of the same federal racketeering law used to send John Gotti and Charles Keating to jail. But legal experts dismissed the racketeering charge as far-fetched.

“It’s cases like this that give RICO a bad name,” said Notre Dame law professor Robert Blakey.

An MTA attorney noted that the suit does not accuse the transit agency--or name anyone at this point--of violating the federal Racketeer Influenced and Corrupt Organizations Act. Plaintiffs’ attorneys said they have left the defendants in the RICO allegation unnamed because they are still building their case.

But not all is bad news: The MTA recently finished tunneling in Hollywood and will open a new line along the Century Freeway this summer and the subway extension to Wilshire Boulevard and Western Avenue next year.

Franklin E. White, who took over as the first chief executive officer of the transit agency two years ago, has filled a number of top jobs with fresh faces, including Kern County’s administrator, who was hired as his top assistant, and an Army Corps of Engineers veteran, who supervises the subway project.

“There are always going to be problems,” White said. “We have the A team in place, and I believe we’re turning the corner.”

The most immediate threat to the MTA comes from Washington.

In its quest to balance the budget within seven years, Congress is considering ending a program established during the Lyndon B. Johnson Administration to provide cities with federal aid for rail construction.

The Los Angeles region, which has been receiving a fourth of the nation’s new rail money, could lose more than $3 billion, transit officials say. Extension of the subway--now about 50% federally funded--into the San Fernando Valley and to the city’s Eastside and Westside would be delayed, as would construction of a trolley from Downtown Los Angeles to Pasadena.

“This is not wolf-crying,” White said. The MTA is paying $300,000 to five Washington lobbying firms to carry its message to Capitol Hill.

Congress appears certain to slash, if not eliminate, federal transit subsidies that have helped fund operations of buses and rail systems since the Gerald R. Ford Administration.

In the case of the MTA, the potential loss is $40 million, about 7% of a $634-million operating budget.

Federal operating subsidies have shrunk steadily since 1982, when Los Angeles County received about $65 million. The reduction could force the agency to seek another increase in the bus fare, which was raised earlier this year from $1.10 to $1.35.

Congress also has moved to reduce the federal aid provided to local transit agencies to buy new buses from 80% to 50%.

If the cuts--which would affect not only the MTA bus fleet but also municipal-run lines from Long Beach to Santa Monica--are approved, “it would say that Congress doesn’t feel that getting people out of their cars and cleaning the air is important,” said Larry Zarian, a Glendale councilman who will become chairman of the MTA board July 1.

But the MTA’s cause has not been helped by the fact that Rep. David Dreier, a member of House Speaker Newt Gingrich’s kitchen cabinet, feels that his San Gabriel Valley district has been given short shrift by the transit agency.

The threatened cuts also come at a time when the agency has sent out pink slips to 234 employees.

In Sacramento, legislation has already passed the Senate to create an elected 14-member MTA board to replace the present board, made up of the Los Angeles mayor, his appointees, Los Angeles County supervisors and representatives from cities throughout the county.

The bill’s author, state Sen. Richard G. Polanco (D-Los Angeles), said the measure will provide greater accountability; the measure’s critics see it as a jobs bill for politicians facing term limits.

The legislation leaves to the transit officials how much the elected members would be paid. Board members now are paid $150 for “any day attending to the business of the authority.” up to $600 a month.

MTA officials have been lobbying to defeat what they say is union-backed legislation, noting that the agency was created only two years ago from a merger of the Southern California Rapid Transit District and the Los Angeles County Transportation Commission. White noted that there are only three directly elected transit boards in the country, one of which is the Bay Area Rapid Transit District board.

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Sen. Tom Hayden (D-Santa Monica), the bill’s co-author, questioned whether the current MTA board members “can effectively manage the MTA, a $3-billion-a-year agency, on a part-time basis.” But White said that current officials have staffs.

Zarian said the legislation would make the transit board more political, “far more indebted to special interests.”

The legislation also would prohibit MTA board members from accepting gifts or political donations greater than $10 from a business seeking a transit contract.

Hayden also is sponsoring a proposed ballot measure, which has cleared the Senate, that would prohibit MTA board members from accepting any contributions from businesses seeking transit contracts.

In a “legislative alert” opposing the Hayden bill, the MTA complained, “Voters from around the state would be determining what is best for Los Angeles County.”

Meanwhile, a pretrial conference is scheduled for August in federal court on a lawsuit seeking to force the MTA to spend more money on the bus system and possibly roll back the bus fare. The plaintiffs’ attorneys have talked with MTA board members, including Mayor Richard Riordan, but no one would speculate on the chances for a settlement.

No hearing date has been set on the lawsuit filed by the Hollywood property owners.

Portions of Hollywood Boulevard above the tunneling sank up to 10 inches. MTA attorneys contend that the bulk of damage to businesses in Hollywood was caused by the January, 1994, earthquake.