State Bailout Bill Doesn’t Cap Transit Funds to County : Bankruptcy: Measure would give the county $500 million more in OCTA taxes than it would pay from property revenue.

Orange County government would get a windfall of almost $500 million under the legislation passed last weekend by the Legislature that allows the Board of Supervisors to raid state transportation tax revenue to bail the county out of bankruptcy.

The hastily drafted bill, approved late Saturday night, authorized the diversion of revenue from a quarter-cent sales tax to the county’s general fund from the Orange County Transportation Authority for 15 years.

The legislation also directs the county to put $70 million a year from its property tax revenue into a special fund that would then be used to repay its bankruptcy debts.

In writing the bill, legislators thought the two sums were roughly equivalent. But the tax is now projected to generate more than $1.5 billion for the general fund, while the property tax the county must set aside is only $1.05 billion.

Critics of the measure, yet to be signed into law by Gov. Pete Wilson, complained Tuesday that Orange County would be limited to contributing no more than $70 million a year to the special bankruptcy fund, but there was no cap on the amount it can receive from the state in transportation tax money.

On Tuesday, an aide to Assemblyman Curt Pringle (R-Garden Grove), a key supporter of the bill, said the intent of the legislation was not to raise extra money for Orange County. Deborah Gonzalez, Pringle’s legislative assistant, said the measure will likely be amended to limit the amount the county can receive in transportation funds.

Meanwhile, OCTA Chief Executive Stan Oftelie and Gary C. Burton, OCTA’s deputy director of finance and administration, were called to appear before the Orange County Grand Jury today to discuss the impact on the county’s bus system. “They’ve asked us to come explain what this might mean to the bus service in the county,” Oftelie said.

Assembly Speaker Doris Allen (R-Cypress) wrote to the governor Tuesday asking him to “withhold approval” of the bill. Calling it a “raid” on public transit, she said the bill attempts to solve the bankruptcy on the backs of 50,000 county bus riders, people whose incomes make them the least able to adjust to a loss of public transport.

OCTA officials said the funds from the transportation sales tax subsidize the county’s bus service. If Wilson signs the bill into law, OCTA has predicted service cutbacks of up to 90%.

“I am afraid the bus service in Orange County will be virtually shut down if it is forced to operate without the funds that would be diverted by this legislation,” Allen said. In addition, she questioned whether the revenue loss might cost the jobs of as many as 2,000 transit employees.

“We do not have the answer to some really important questions,” she said.

Los Angeles Mayor Richard Riordan also came out in opposition to the bill Tuesday and urged Wilson to veto it. The measure would enable Los Angeles County to siphon off $375 million in transit money over the next five years, but Riordan said the money was intended for the Metropolitan Transportation Authority and questioned the legality of the transfer.

Gonzalez said the Legislature will probably take action to correct the flaw in the legislation and limit the amount of transportation funds that can be diverted to the county.

“I’m sure the [Orange County] delegation would be prepared to deal with that issue. If there needs to be cleanup legislation, I’m sure the delegation would support that,” Gonzalez said.