Airport Funds Shield Urged

Turning up the pressure on Mayor Richard Riordan to back off from Los Angeles International Airport revenues, an Arizona senator Friday introduced legislation aimed at making it much harder for Los Angeles and other cities to get their hands on money from their airports.

In introducing his bill, Republican Sen. John McCain of Arizona made it clear his intent is to see that airport revenues are used only for airports, a stance the airline industry has been hotly lobbying for, while Riordan and officials of some other cities have been looking to siphon money from airports for their shrunken general funds.

McCain’s measure would apply to virtually any airport and would require annual federal audits of airport books to be sure no funds were improperly funneled to other purposes. Funds deemed illegally diverted would be subject to a penalty plus interest. If not paid, the assessment amount would be deducted from a city’s share of federal funds or sought through the courts.

Additionally, the bill calls for elimination in 10 years of certain fund diversions now allowed at some airports. St. Louis has such a federal waiver, and Los Angeles has been seeking Department of Transportation permission to tap airport funds in several ways.

It was not immediately clear how many other cities would be affected by the legislation. San Francisco has court permission to take part of its airport revenues. In Los Angeles, as in many other cities, airports are run by quasi-independent city agencies.

Riordan’s administration, which has aggressively fought for what it calls city taxpayers’ “fair return on [their] investment” in the facility, quickly denounced the McCain bill as “a wholly owned subsidiary of the airlines and their lobbyists.” Riordan’s proposed budget anticipates receiving $30 million from the Department of Airports for city services.

The McCain bill is the latest volley in the pitched battle between the city and a coalition led by the Air Transport Assn. of America over the use of airport revenues.

Riordan, along with his predecessor, Tom Bradley, and the City Council, has long maintained that city residents deserve some financial benefit for providing an important, internationally used airport and for putting up with the noise, pollution and other problems it generates.

Others, including the city controller and the Los Angeles County Grand Jury, also have concluded that the city is entitled to more than the money it now receives--reimbursement for direct services, such as firefighting.

The McCain bill “works to discourage entrepreneurship and the running of the airports like a business,” the mayor’s office said. “Los Angeles has only taken actions at the airport that are legally defensible. The airlines and their lobbyists have engaged in a multimillion-dollar campaign to spread disinformation regarding the activities at LAX.”

The Air Transport Assn. released its own statement commending McCain for introducing the legislation and saying Los Angeles is to blame for this and other federal attempts to pressure the city. The association said the efforts are “the direct result of the mayor’s latest attempt to divert additional airport taxes to the city’s general fund.”

Los Angeles has won permission to raise landing fees at LAX but has so far been unable to get federal permission to use the proceeds for general city purposes, including paying for an ambitious program to expand the Police Department. Officials also are attempting to recoup what they claim is money owed, with interest, for construction and expansion of the airport and are considering trying to get permission to levy a fuel flow tax, as some other airports have been doing.

The airline industry has in recent days persuaded congressional allies to threaten to go after federal funds for key transportation projects in the region, including the Alameda Corridor freight rail system and the Metropolitan Transportation Authority’s massive subway and other construction projects.

Riordan and allies on the Alameda Corridor project have stepped up their counterattack with help from Gov. Pete Wilson and the California congressional delegation. Long Beach Mayor Beverly O’Neill and others plan to go to Washington next week to try to save the corridor funding.