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By HOWARD FINE

Staff Reporter

Pouring billions of dollars into a subway that would serve only a tiny fraction of Angelenos. Refusing to build schools in the inner city. Failing to move aggressively on renovating the Coliseum.

Call them blunders or missed opportunities that government made 20 years ago and that Angelenos are still living with today. Looking back on these and other decisions, each could have gone the other way, dramatically reshaping the landscape we know now.

Take the most glaring example: the decision by L.A.’s elected officials most notably the late Mayor Tom Bradley in the latter half of the ’70s to pursue billions of dollars in federal funds for a subway.

“Every other world-class city had a subway, so L.A. had to have one, too,” said Jack Kyser, chief economist for the Economic Development Corp.

Twenty years and nearly $5 billion later, L.A. has 11 miles of subway, with another four miles slated to open next year. Even this modest progress came only after years of controversy, including construction worker deaths and the sinking of Hollywood Boulevard, which became a national spectacle.

Voters eventually got so fed up with the cost and controversies that last year they passed Measure A, which bars further subway construction.

So who actually uses the subway? So far, total ridership is about 60,000 passengers a day, about 5 percent of L.A. mass transit riders and less than 2 percent of all commuters.

“It’s called Tom Bradley’s folly. It was one of the worst decisions of his mayoral term,” said Stephen Erie, professor of government at UC San Diego, who has followed the Metropolitan Transportation Authority and other L.A.-area government agencies.

“Think of all we could have done with those dollars, if we hadn’t poured it all down the subway,” Erie said. While much of the money from the federal government was earmarked specifically for subway construction, he said there’s no reason to believe that Congress would not have stepped up to fund other alternatives, like light rail, busways, or purchasing more buses.

At $50 million a mile, for example, L.A. could have built 100 miles of light rail for what the Red Line subway has cost so far and served many times more people. Dedicated busways like those in Curitiba, Brazil, would have cost even less per mile.

Meanwhile, the region’s bus system has deteriorated over the last 20 years to the point that a federal judicial appointee has had to step in and require the MTA to buy more buses to relieve overcrowding. The MTA is fighting that order, saying it does not have enough money to comply.

“I don’t think we’d be in the situation we’re in with the bus system if we had not put all those dollars into the subway,” Erie said.

While the subway may rank as one of the region’s most obvious blunders, another set of government decisions has had a more far-reaching impact. That came in response to Proposition 13, the 1978 statewide ballot measure that capped property tax increases and reduced revenues for local governments.

Instead of using the opportunity to figure out how to live within their means or restructure the system of government finance, cities and the state Legislature took the easy way out in 1979. The state used a surplus to fill in some of the missing revenues; in return, cities and counties ceded control to the state Legislature of property tax and some sales tax revenues.

This solution was only meant to be temporary, said Fernando Guerra, director of the Center for the Study of Los Angeles at Loyola Marymount University. But as is often the case with government, temporary solutions eventually become permanent.

“It became a Faustian bargain with dire consequences down the line,” Guerra said. “Cities became totally dependent on the state to continually bail them out. When the state itself was in deep financial trouble in the early ’90s, they stopped the flow of dollars to the cities, devastating local services.”

But the consequences of that informal pact did not stop there. Because cities were deprived of much of their property tax revenues, they went after the only major revenue source left: sales tax revenues. Throughout the next 20 years, cities would battle each other for lucrative shopping malls and later, auto malls instead of building more housing or trying to lure higher-paying manufacturing jobs. This process became known as the “fiscalization of land use.” The regional costs have been enormous, with adjacent cities spending huge sums competing to attract a shopping mall that would serve their respective populations equally well from either location, just so they can get the mall’s sales tax revenue.

And once the mall is built, the work created is nowhere near the quality of manufacturing jobs that once dominated the local economy.

“Retail jobs aren’t middle-class jobs,” Kyser said. “That’s one big reason why the middle class has shrunk so dramatically here over the last 20 years.”

Another consequence of these decisions has been increasing reliance on redevelopment agencies and other techniques to fund basic infrastructure needs. These tools rely on future revenues to repay bonds, but those anticipated revenues didn’t always materialize, which has led to frequent brushes with financial disaster.

In Los Angeles, this was compounded by a City Council decision in 1979 to cap the revenues from downtown redevelopment projects, a move that many view as one of the reasons the L.A. Community Redevelopment Agency is currently in financial distress.

Meanwhile, with the economy chugging along in the late ’70s, government bodies up and down the state were responding to increasing pressure from voters on quality-of-life issues. They increased employee benefits, cracked down on pollution from businesses, and passed zoning laws restricting development.

Among these was a series of state legislative decisions to make it easier for employees to claim they had been injured on the job. For the next dozen years, employer costs for workers’ compensation steadily climbed. Then, when the recession hit in the early ’90s, costs exploded as unscrupulous employees and clinics took advantage of loopholes in the laws that had been earlier passed. Fraudulent claims cost employers throughout the state billions of dollars each year, at a time when the recession was forcing employers to watch every penny. The state Legislature finally clamped down in 1993 tightening some of the same standards that had been loosened nearly 15 years earlier.

“This was all part of an attitude that developed in the late ’70s and lasted throughout the ’80s that basically ignored the needs of business,” Kyser said. “It allowed a bad business environment to develop, which came back to haunt everyone during the recession.”

Another set of government decisions had a similarly dramatic impact: this time, it was the school system that suffered unintended consequences. It started with court-ordered busing of minority students, a decision that sparked so much controversy that the ruling was later reversed. The immediate result was “white flight,” in which white students fled the public school system en masse for private schools. Many of those students never returned.

But equally important was the decision by the Los Angeles Unified School District Board of Education not to build schools in the inner city. Doing so, it was feared, would violate the desegregation order, according to Guerra.

“This was one of the dumbest decisions ever made by the school district,” Guerra said. “It led directly to the overcrowding we now see.”

Building a series of smaller schools over a longer period of time would have averted much of the overcrowding that is now crippling inner-city schools, according to Les Birdsall, a former principal and teacher who is now a school reform advocate on the Westside. There would have been no need to build such a massive school as the Belmont Learning Center, a project that will end up costing taxpayers at least $200 million. To make matters worse, the Belmont project may very well be abandoned because of recent revelations of severe contamination on the site.

The late 1970s saw another seemingly innocuous government decision that had unintended consequences down the road. The agency this time was the Coliseum Commission. The decision: not to move aggressively enough to keep the Los Angeles Rams from leaving town, which they did at the end of 1979. The Coliseum Commission did offer to build a small number of luxury suites for the Rams, but the commission did not come close to matching an offer from Anaheim, which threw free land into its deal.

“It would have been a lot cheaper to renovate the Coliseum then, to make it more suitable for football,” Guerra said. “Instead, it led to the last two decades of shenanigans with the Raiders and the scramble now to land a football team.”

Already, some $100 million has been spent on retrofitting the Coliseum in the wake of the January 1994 Northridge earthquake, and another $300 million is being planned to further overhaul the stadium to attract a new NFL team.

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