The power crisis and declining state tax revenues due to the slowing economy are jeopardizing the future funding of several key L.A. projects, including expansion of the Blue Line and additional support for the public health care system.

There’s a growing sense among state and local officials that there may be budget cuts in the offing.

“I’ve talked with several state legislators and they’ve told me: ‘Don’t count on the same kind of money you got last year for infrastructure projects,'” said L.A. County Supervisor Zev Yaroslavsky.

The supervisor, who also sits on the board of the Metropolitan Transportation Authority, said that state funds may be held back for several proposed light rail projects, including the lines to East L.A. and the Westside and the east-west line through the San Fernando Valley.

Also, Yaroslavsky said, funding for several additional health care clinics around the county could also be jeopardized. A health deputy to Supervisor Gloria Molina added that tens of millions of dollars earmarked for expansion of L.A.’s trauma network are also at risk.

This is all part of a broader retrenching that’s taking place now in Sacramento, as state officials grow increasingly concerned about the state’s financial picture. Last month, the state Senate budget committee voted to put on hold $1.9 billion worth of one-time funded projects in Gov. Gray Davis’ 2001-02 budget, as legislators tried to figure out how much money would be available to them. They expect the picture to be clarified with the release of the so-called May revise from the Davis administration, which is due out the week of May 15.

The surplus of $10 billion once projected for the 2001-02 budget year is now, by some estimates, down to $500 million or less. And while next year’s budget may be augmented by an expected bond sale to refund the state’s electricity purchases, there are no guarantees.

“The surplus next year is highly suspect,” said state Controller Kathleen Connell, who is also running for L.A. mayor. “The huge spending on energy and the substantial reduction in revenues will again defer capital investments by the state. And that means some of our infrastructure projects will have to be delayed or deferred.”

Connell said that it has only been in the last few weeks that legislators have come to grips with this.

“When I spoke to a gathering of lawmakers a couple weeks ago, there wasn’t a single legislator who disagreed with my comments about our fiscal situation,” she said. “That’s quite a change from the beginning of the session.”

As a result, Connell and other Sacramento observers said, legislators are now far more wary about funding projects that were not long ago regarded as vital for the state’s future.

“The new conventional wisdom is that, if you’re trying to get additional funding, it probably isn’t going to happen,” said Fred Main, senior vice president of the California Chamber of Commerce.

That change was evidenced in last month’s state Senate budget committee’s decision to set aside, or put on hold, that $1.9 billion in one-time capital investment projects. Among the items set aside statewide:

– $100 million in beach cleanup funds;

– $100 million to convert diesel-fueled government vehicles to cleaner-burning fuels;

– $74 million for flood control projects; and

– $40 million for touch-screen voting installation.

But dwarfing all those is the set-aside of $325 million in local government funding: $250 million for “local agency relief,” and $75 million in one-time grants to local governments.

But Yaroslavsky said he has been assured that deep cuts in local government funding from current levels are not in the offing, at least for now. And that includes the state’s commitment to provide up to $300 million over the next four years to bail out the county’s health care system.

“If they have to start to dig into local government funds, that could be really catastrophic,” he said. “But they are not at that point, yet.”

For the present, education funding is largely protected by the Proposition 98 constitutional guarantee, which set a minimum funding level of 40 percent of the state budget and required at least half of all surplus funds be devoted to education.

But in his January budget, Davis earmarked $2 billion over the Prop. 98 minimum for education.

Several legislative staffers and lobbyists said that some or all of this $2 billion could be sidelined from this year’s budget.

The transportation funding picture is more complex. Last year, the Legislature passed and Davis signed a $6 billion transportation package loaded with funding for many L.A.-area projects, from the 405/101 interchange upgrade to the Pasadena Blue Line. As part of that package, a separate fund was formed outside the state’s general fund that would be used for future transportation projects.

Funds called safe

Local transportation officials at the MTA say most of their state funds are part of this package and that those funds are safe, even if the all the money has yet to be spent.

But one transportation lobbyist was not so sure.

“I remember the early 1990s, when several billion dollars was ‘borrowed’ from the highway trust fund and other special transportation funds to cover the huge state budget deficit,” said David Ackerman, transportation lobbyist for the California Chamber of Commerce and other business groups.

In response to this, voters in 1998 approved Proposition 2, which limits the ability of the state to borrow from transportation funds. That measure stipulates that any funds taken from these accounts must be replaced in the same fiscal year, unless the governor declares a fiscal state of emergency. (No such emergency has been declared in decades, despite the steep downturn in the early 1990s.)

But, Ackerman said, this measure has yet to be tested; he said he isn’t ruling out the chance that legislators could find a loophole.