THE STATE BUDGET : Legislative Life After the MTA Battle: All Gloves Off

It’s easy to blame this year’s state budget traumas on the same old irritants: personalities, political ambitions, partisan warfare, public apathy. But what made Sacramento’s latest fiscal shenanigans truly memorable was the emergence of the Metropolitan Transit Authority as a pawn in the budget end-game. Marvin Holen, a former Rapid Transit District board member and MTA alternate, dubbed the transportation agency “the largest checkbook in Los Angeles. If you equate power with money,” he said, “it’s a very powerful agency.” But that did not protect the MTA from an attempted raid on its treasury.

For a while, a plan to siphon off $75 million a year, for five years, from the transportation agency to help L.A. County pay its bills held up passage of the budget. Although Gov. Pete Wilson, over the objections of the county’s Assembly Democrats, vetoed the funds shift, lawmakers did not hesitate to go after MTA coffers in their desperate search for county revenue. Why now?

The simple explanation is that legislators went after MTA’s money because it was there for the taking. More important, MTA was ripe for picking because of what one observer labeled its “never-ending failures both of policy and implementation.” Cost over-runs, construction foul-ups, corruption charges and public-relations disasters have eroded the agency’s public acceptance and political support.

The vetoed raid on MTA money was not the first time Sacramento has preyed on institutions that have lost political clout. The state’s 1992-93 and 1993-94 budgets shifted billions of dollars in property taxes from counties and cities to constitutionally protected public schools. This raid was a natural outcome of a transfer of funding power from local governments to Sacramento after the Legislature bailed out cities and counties suffering from revenue shock because of Proposition 13. When tensions between declining economic resources and increased demands for social services threatened the “no-new-taxes” pledges of state politicians, city and county coffers, filled with Sacramento’s help, became appealing targets.

In 1992, budget writers went after the once-sacrosanct University of California. Economics--defense downsizing, shrinking agribusiness and high-tech research--and the university’s changing demographics--fewer Anglo students--contributed to UC’s decline in political stature. Also, electoral clout was moving to the suburbs, where the children and grandchildren of Californians who voted and paid taxes were no longer the students who defined the university. One result was a weakened UC political base.

There’s another reason L.A. Democrats may have coveted what might seem a piddling amount, given the county’s huge $1.2 billion deficit. According to Holen, “the county can borrow up to approximately $300 million by committing the $75 million per year for five years as a source of repayment.”

Before he vetoed the MTA-transfer legislation, the governor insisted [that] “what’s holding [the bill] up is the fact that Los Angeles seems to be badly split [on the matter]. This is a bill to which transportation authorities and Mayor [Richard] Riordan are violently objecting.” Indeed, the MTA survived the revenue hit in large part because Riordan lobbied hard against it, for many reasons.

As mayor of the county’s largest city, Riordan was no doubt mindful of the potentially harmful effects cutbacks in county health and social services would have on L.A. citizens. But L.A. County is not Riordan’s constituency. And Angelenos who do depend on the threatened services--mostly minority and poor--are not part of Riordan’s electoral base.

Furthermore, the MTA is Riordan’s bailiwick. He controls four appointments to its 13-member board and serves as the authority’s vice chairman. Although the mayor has sharply criticized the MTA and its staff, he was apparently swayed by the argument that shifting its funds would hurt public mass transit by stalling, or even killing, the subway and undermining support for L.A.’s bus system. Said a longtime observer of transit politics: “Things have changed over 20 years. Very few people in the Valley used buses; now suburbia uses the bus system.” And suburbia is Riordan territory.

Finally, many City Hall denizens believe the county has created its own problems by not downsizing earlier, as Los Angeles and other cities did. Riordan told a reporter that he couldn’t support the MTA-fund transfer because it “provides no incentive for the county to get its budget house in order.”

By demonstrating strong political and lobbying skills, Riordan was among the winners in the budget fight. It remains to be seen whether the MTA can stave off future designs on its treasury. There’s little doubt another raid will be mounted. When economic or political forces put a revenue source into play, it’s likely to remain such until politics or economics change. If the MTA doesn’t get its business together, the next logical step for the county and its allies would be to make any fund diversion permanent.

On another level, the MTA battle may foreshadow the way business will get done in the changing political climate of Sacramento and Washington. It re-illustrates the “quick fix” mentality that pervades Sacramento in the wake of term limits. Neither the long-range health care nor transportation needs of Los Angeles County can be honestly addressed by fiscal shell games like raiding the MTA. But most of the current crop of state legislators won’t be around on reckoning day when the painful restructuring of the county can no longer be postponed.

This year’s budget debate may also give us a glimpse of legislative life under Congress’ plan to give the states no-strings block grants to pay for social programs. Mandates now constrict legislative budget decisions, but they also help to define the limits of ideological warfare. That’s one reason why abortion and welfare were finally taken off the table.

The MTA scuffle shows us what might happen if funding guidelines are put up for grabs and the state budget becomes enmeshed in parochial policy battles--and issues are settled when somebody surrenders or dies.

Elected officials--and ordinary Californians--have begun to reap the whirlwind of ducking hard decisions in an era of political Balkanization and economic retrenchment. And a whirlwind grants no respite for reflection. It only destroys.*