Counties Seek Detour of Transit Funds : Legislature: O.C. Republicans, L.A. Democrats try to bail out their counties by linking a tax diversion to the state budget.

Orange County lawmakers spent Friday in a scramble of closed-door sessions in the state Capitol, debating the best way to handle a proposal to use millions in transportation-tax dollars now subsidizing bus service for the county’s bankruptcy recovery effort.

The Republican legislators, along with a group of Democrats from Los Angeles, are trying to tie the tax diversion to the state budget, which is scheduled for a vote this weekend.

Sen. Richard Polanco (D-Los Angeles) crafted a bill that would give Los Angeles County $75 million annually for five years to help plug its current $1.2-billion budget shortfall, and would require that the bus money be replaced with other transportation funds. The bill failed on a procedural vote.

Polanco had dropped Orange County from his proposal because of infighting in the Orange County delegation over whether to include a state trustee in the bill.

“That particular fund is available to Orange County and other counties, but this proposal is strictly for L.A.,” Polanco said at a news conference. Noting that Orange County lawmakers were still working on a parallel plan, he added, “It’s not a done deal yet.”

Assemblyman Curt Pringle (R-Garden Grove) said he planned to take up a similar bill today that would give Orange County as much as $70 million annually for 15 years. He also vowed to work with members of the Los Angeles County delegation on a joint effort for budget relief for transit funds.

Pringle’s plan would allow the bus money to be replaced with money from Measure M--a separate half-cent sales tax passed in 1990 for specific transportation improvements--and require that the diverted money be spent only as part of a complete recovery plan approved in U.S. Bankruptcy Court, according to legislative assistant Deborah Gonzalez.

She and staff members representing other Orange County lawmakers met Friday afternoon with Kevin Sloat, Gov. Pete Wilson’s deputy chief of staff, and expressed confidence that Wilson would not approve a transportation tax-diversion bill for Los Angeles County alone.

“These proposals will have to go together if they go at all,” Gonzalez said. “I hope the governor would see that our need is as great, or greater, than L.A. County. To give L.A. County something and not give it to Orange County would be inappropriate.”

Sloat did not return telephone calls Friday.

The Pringle bill will say nothing about a state trustee, Gonzalez said.

While Sen. William R. Craven (R-Oceanside) has argued that a provision threatening the appointment of a trustee should be included in any bill that gives the county revenue, he said Friday that he would back the tax-diversion bill as long as there are controls on how the money is spent.

“If the funds are going to be available to L.A., they should be available for our county as well,” said Scott Johnson, chief counsel to Craven, who represents a portion of south Orange County. “We would be remiss in not getting the same authorization for our county.”

Assembly Speaker Doris Allen (R-Cypress), who argued against the diversion of money from the Orange County Transportation Authority, said the Legislature should not rush to action on the county’s recovery proposal and noted that a group of cities and special districts will offer their own recovery plan next week.

“What the Speaker has said is, ‘Please, all you governmental entities in Orange County, get in a room and work it out amongst yourselves and then come to Sacramento, and if you need legislation to accomplish your goal, we’ll help you,’ ” said Dana Reed, a lawyer working for Allen.

“The one thing that she is absolutely adamant about is she does not want any plan that is going to exacerbate the problems in Orange County,” Reed said of Allen. “If in their rush to put this plan together they somehow cause damage to the bus system--which is one of the few functions of government that’s still working--she doesn’t want to have any part of it.”

Supervisor Jim Silva also stepped into the fray, sending Allen a letter saying he supports the transfer of OCTA funds to the county but opposes any move to establish a state trustee.

Jan Mittermeier, Orange County’s interim chief executive officer, said late Friday that she was unsure whether the OCTA money would come through this weekend, and whether it was even the best route for the county to take.

“We want something that works best for everyone in the county. Whatever that is, that’s what we need, that’s what we want,” she said. “I don’t mean just county government. I mean everyone in the county needs to come out a winner in this.”

Times staff writers Max Vanzi in Sacramento and Matt Lait in Santa Ana contributed to this report.