Budget may ride on cuts in transit

State lawmakers appeared to be closing in on a spending plan late Thursday that would divert roughly $1 billion away from mass transit, forcing Los Angeles to put off plans for extending parts of the Expo light rail line and widening some freeways.

The money, most of which comes from a sales tax on gasoline paid by drivers, would instead be used to help erase a multibillion-dollar deficit that the state has been carrying for years. The decision to divert the funds came as part of a deal brokered by legislative leaders in an effort to lift a three-week budget impasse.

The compromise spending plan would also cut $124 million in welfare payments to the elderly and disabled and scale back drug treatment programs for prisoners. It includes multimillion-dollar tax breaks for the film industry and other businesses.

Most of the moves come at the insistence of GOP lawmakers, who have been blocking passage of a budget until more cuts were made.

“When it comes to the question of balancing a budget, tough decisions are necessarily made,” said Sen. Mark Ridley-Thomas (D-Los Angeles). “This is a compromise to get a budget done, rather than wreak havoc on the state by not having budget.”

Although the cuts may go far enough to draw the votes of GOP members in the Assembly, the Senate Republican caucus continues to hold out for more. Senate Leader Don Perata (D-Oakland) is vowing not to make additional concessions, leaving the odds of a budget being adopted within the week uncertain. The Legislature, which was due to adjourn today for a monthlong summer recess, was preparing to vote on the budget late Thursday night or early today.

Democrats said they agreed to the big cut to transit funding in an effort to avoid having to take money away from schools and healthcare programs. Republicans justified the cut by noting that state transportation funding will continue to increase overall.

The money that would be used to balance the budget would be siphoned from a windfall from the sales tax on gasoline generated by soaring prices at the pump. Even after the windfall is diverted, Republicans say, there still would be funds to increase spending on transportation above what it was last year.

But local transportation officials said the tax was created specifically to fund transportation projects. They characterized the cut as a major setback, warning that certain projects could get delayed for years.

Among them is the Expo Line light rail extension that would connect Culver City to Santa Monica, a project that local officials have envisioned for decades. The city of Santa Monica has already purchased land for a station.

Other projects that would be delayed include widening Interstate 5, in part along a stretch at the Orange County/L.A. County line, where the daily bottlenecking has become legendary. A project that would complete the gap in carpool lanes on the 10 Freeway in the eastern San Gabriel Valley is also threatened.

The budget deal will impart a “ripple effect through our entire long-range plan,” said David Yale, the Metropolitan Transportation Authority’s deputy executive director for regional programming.

“It really puts us in a bad situation with these new projects that we were about to deliver,” Yale said.

Los Angeles County alone stands to lose $336 million.

Supervisor Zev Yaroslavsky accused state officials of breaking their promise to voters, who approved $19.9 billion in borrowing for transportation projects in November. He said the county would have to use its share of the money to cover what is lost in this budget agreement, instead of on the new projects that were pitched to voters.

“This is a classic bait and switch operation coming out of Sacramento,” Yaroslavsky said. “It’s breaking faith with the people of California.”

For Senate Republicans, however, the cuts in the compromise budget plan moving through the Assembly aren’t deep enough. Senate Republican Leader Dick Ackerman of Irvine said Thursday night that his caucus would continue to block passage of a budget until the Democrats agree to more spending reductions.

He said the proposal that was poised to come before the Assembly would still leave the state on a path toward spending billions more than it is expected to receive in revenue in future years.

“We are just trying to get them to slow down the growth of some of these programs,” Ackerman said. “They want to keep spending even though they don’t have the money to do it.”

But Perata said he was through negotiating. He said he would put up for a vote in the Senate today a budget with the compromises Democrats already have made.

“We have gone way beyond where I ever thought we would go as Democrats,” Perata said. “This is not a budget I would put on my highlight reel. They could. They could go home and have a freaking parade.”

Perata said it was unlikely that Senate Democrats would sign off on the tax breaks that were part of the budget plan Assembly members were preparing to vote on Thursday night. He also criticized Republicans for pushing to relax state environmental regulations on builders as part of the spending negotiations, saying such proposals should be vetted through the normal legislative process, not rushed into law as part of a budget deal.

Ackerman said onerous tax laws and overly aggressive enforcement of environmental regulations are hurting the economy “and should be dealt with now.”

Democrats are eager, however, to avoid a prolonged budget stalemate. In February they will ask voters to relax term limits. Approval of the ballot measure would allow lawmakers to extend the length of their terms in either the Assembly or the Senate.

It would permit Perata, who under current law must leave office next year, to remain in power several years longer. It would do the same for Assembly Speaker Fabian Nunez (D-Los Angeles).

But Ackerman has more immediate problems. His hold on power as Republican leader is tenuous. Other caucus members have criticized him in the past as being too willing to make deals with Democrats. There have been attempts to remove him from his post.

Perata suggested it may take involvement by Gov. Arnold Schwarzenegger to break the logjam. The governor so far has remained largely removed from the budget negotiations, a departure from recent years. Most of his spending priorities were reflected in the budget blueprint that Democrats adopted last month.

“The governor has to get in the game,” Perata said. “These are Republicans. They are holding up the state.”

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evan.halper@latimes.com

nancy.vogel@latimes.com

Times staff writer Rong-Gong Lin II contributed to this report.