Funding

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HOWARD FINE

Staff Reporter

L.A. county and city officials say billions of dollars are needed, right away, to fix the area’s aging infrastructure before streets, bridges and pipes reach their breaking points.

But with their own budgets strained by years of recession and financial crises, L.A. Mayor Richard Riordan and County Administrative Officer David Janssen are turning to Sacramento and Washington, where the booming economy has resulted in multibillion-dollar surpluses.

So far, state and federal government leaders have remained somewhat tight-fisted, providing tens of millions of dollars in infrastructure funds rather than the billions sought by local governments. The situation has caused concern that the economic window of opportunity to take care of the infrastructure backlog may close before a significant dent can be made.

“The next two or three years are absolutely crucial for getting these projects underway, before the next downturn sets in,” said Ezunial “Eze” Burts, president and chief executive of the Los Angeles Area Chamber of Commerce. “Otherwise, the continuing deterioration of our infrastructure could result in minor disasters, like sinkholes, water-main breaks, or collapsing bridges. These things are already happening in Eastern U.S. cities, and it’s only a matter of time before they happen here.”

The Riordan administration estimates that the city of L.A. needs $3.4 billion in street and traffic improvements, and another $2 billion for projects like flood control systems, sidewalk repairs and sewer system upgrades.

“We’re talking billions of dollars here, which far outstrips our ability to take care of with general fund dollars,” Riordan said.

The city tried going to voters this spring with a $744 million bond measure for new police and fire facilities, but that proposal narrowly missed collecting the two-thirds margin needed for approval. Observers attribute defeat of the measure, in part, to lingering ill will toward City Hall from the imposition of a $13 per household annual brush clearance fee. (Due to the uproar, the fee was later rescinded and refunded.)

Even without the brush clearance fee controversy, the bond measure faced long odds, as voters typically vote against spending local revenues for infrastructure repairs. As a result, the city has been forced to rely on whatever it can get from state and federal sources.

Janssen said the county has a $1.4 billion backlog in capital projects, including new sheriff’s substations and park renovations. The county has been in such dire fiscal straits in recent years that officials haven’t even come up with an estimate of what it would take to fix roads and sewers, Janssen added.

“All I can say is that it would be a substantial figure, more than the $1.4 billion for the capital projects I’ve already mentioned,” he said.

Statewide, the needs are even greater. According to a report from the California Business Roundtable a group of chief executives from 70 major companies the state needs to invest about $90 billion in its roads, water systems, sewers, bridges, school buildings and public safety facilities over the next 10 years.

This year’s state budget showed a $4.4 billion surplus in its early stages a month ago, but the final version approved last week had earmarked most of that surplus to tax cuts and programs other than infrastructure.

The budget does allocate $150 million more than last year to local government coffers throughout the state. It also earmarks several hundred million dollars for specific local projects like parks and senior centers including $80 million for the L.A. County area.

While this is being viewed by local government and business officials as a good first step, it does not come close to offsetting the more than $3 billion in property taxes that the state has diverted from local governments during each of the last six years to balance its own books.

Of that, about $400 million a year has been diverted from the county of L.A., according to Janssen.

“There’s no question that our priority legislative program is the return of those dollars that have been diverted,” Janssen said. “If we had $400 million a year more, we could make a significant dent on this infrastructure deficit.”

But that is not likely to happen anytime soon.

That’s because the current fight over infrastructure dollars is just the latest chapter in a debate that has been raging ever since the passage of Proposition 13 in 1978. With Prop. 13 having deprived local governments of much of the property tax revenues they previously had relied on, the question ever since has been how to fill that revenue gap.

In this year’s budget, Gov. Davis and the Legislature did add another $425 million to the $50 million already in the state’s fledgling infrastructure bank. However, those monies are for loans to local governments, and must be paid back with interest.

“It sounds good, but this may not make a lot of sense for large entities (like the city and county of Los Angeles) that can get favorable rates for their own borrowing,” Janssen said.

Nonetheless, Davis administration officials maintain that the current budget provides a good start on infrastructure funding.

“If revenues permit, we will continue to do this in future budgets,” said Sandy Harrison, spokesman for the state Department of Finance. “But keep in mind that the governor has said that education is his first, second and third priority, and that will continue.”

State lawmakers are discussing, however, various proposals for a series of multibillion-dollar infrastructure bond measures. One of those proposals is being considered by state Sen. John Burton, D-San Francisco. It would involve four, $4 billion bond measures over the next eight years, each of which would be subject to voter approval.

However, observers say, there is tremendous reticence among members of the fiscally cautious Davis administration about taking on so much debt.

Nonetheless, committee discussions on Burton’s bond proposal and others are set for next month, according to Burton spokesman David Sebeck.

Meanwhile, at the federal level, the picture isn’t much more encouraging, despite the news last week that the Clinton administration is projecting a cumulative surplus of $6 trillion over the next 15 years $1 trillion more than previous estimates.

That’s because as part of the budget balancing agreements of the mid-1990s, federal funding for many local programs is being ratcheted down. This forces cities to come up with more of their own funds for various programs, leaving less available for infrastructure repairs.

Officials with the National League of Cities want the federal funding restored.

“This is a time when the president and Congress are saying what a great job we’ve done to achieve this budget surplus. Meanwhile, the cities are getting hosed with these cuts,” said National League of Cities spokesman Randy Arndt.

Another possible threat, according to Anita Zusman, a lobbyist for the L.A. Area Chamber of Commerce, is a move in Congress to reduce California’s share of federal transportation dollars. A vote on that was initially scheduled for last month, but has been postponed.

“This was very serious. Stopping that was one of our top priorities on our Washington trip,” Zusman said.

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