MTA MIGHT SIDETRACK SALES TAXES FROM CITY.

Byline: David Bloom, Patrick McGreevy and Paul Hefner Daily News Staff Writers

The MTA escalated the battle over an east-west Valley rail line Wednesday by threatening to withhold millions in sales taxes from Los Angeles unless the City Council hands over $200 million it promised for rail projects.

At the same time, the Valley was offered two tokens intended to lessen anger over the Valley being shortchanged on city transit projects and put to the back of the line for rail.

Valley legislative leaders brokered a deal that would provide a $51 million state loan to the MTA to begin design work on the Valley line, and an MTA committee agreed to provide $3.3 million for Valley transit projects, including $2 million to buy land for a transit hub at Warner Center.

But another MTA committee, on a motion made by Supervisor Michael D. Antonovich, who represents part of the Valley, voted to freeze Los Angeles' share of transportation sales taxes - estimated at about $80 million for next fiscal year. The vote drew an angry response from City Council members from the Valley.

``It certainly flies in the face of the commitment to the Valley line,'' said Councilman Richard Alarcon. ``It's definitely a hardball tactic.''

Alarcon said city transit programs heavily depend on Proposition A and C funds, so any action to block their transfer to the city would cause serious consequences.

``It would damage us severely,'' Alarcon said.

Councilman Mike Feuer, who authored the recent council motion that blocked the city's transfer of $200 million in transit funds to the MTA until the agency moves up the start date of the east-west Valley rail line, also criticized the Antonovich proposal for countersanctions.

``The motion that passed in MTA today does not lead in a constructive direction,'' said Feuer, who downplayed its likelihood of passing the full MTA board.

Antonovich, whose motion passed on a 3-2 vote, said the move was necessary to force the city to pay money it owes for the construction of the Red Line subway between MacArthur Park and Hollywood.

``This action is to draw attention to their failure and make them move forward to pay their bills,'' Antonovich said. ``They should pay up or we should discontinue subsidizing them. All we're asking them to do is honor their commitment.''

The MTA was expected to pass along to Los Angeles $40.8 million in Proposition A funds and an additional $34.1 million under Proposition C next fiscal year, said MTA Chief Financial Officer Terry Matsumoto.

The city's Department of Transportation is supposed to receive an additional $4.4 million in subsidies for its own bus operations, bringing the city's share to $79.3 million.

But Supervisor Zev Yaroslavsky dismissed the motion as ``bluster.''

``I don't think it's going anywhere in the long run. It can be an escalation of titanic proportions but in the end, the MTA loses. The MTA freezes the San Fernando Valley out at its own peril.''

Meanwhile, a key group of Assembly members has hashed out terms of a state bailout plan for the beleaguered transportation agency.

The deal will allow the MTA an advance of up to $135 million, $51 million of which would go for design work on an east-west Valley rail line. The work was left out of an original MTA recovery plan.

Assemblyman Jack Scott met Tuesday with several Valley lawmakers as well as members of the region's black caucus, who all agreed to support the loan proposal. It calls for the MTA to tap state funds early for up to $54 million to extend the Metro Rail line to Pasadena and for up to $30 million for a bus guideway project in the Exposition and Crenshaw corridors.

Scott, along with Assemblyman Robert Hertzberg, D-Van Nuys, had been working to broker the deal since last week.

``For the first time, it earmarks money for the San Fernando Valley,'' Hertzberg said. ``It's a great victory for the Valley.''

Feuer welcomed efforts in the state Legislature to provide financing that could move the Valley project along but said the offer doesn't go far enough.

The money is only for pre-construction design work on the Valley line, and he still will insist that the MTA sign an agreement committing to start construction on a specific date, and not as late as 2011 as was proposed by the MTA's recently approved rail recovery plan.

``I think it's important to have an agreement that moves up construction from 2011 with meaningful milestones,'' Feuer said.

Alarcon also said the bottom line demand is for a firm MTA commitment to an early construction date, but he said the Valley project can be put back on track by the state funding proposals.

MTA Acting Chief Executive Officer Linda Bohlinger said the motion was a sign of the MTA committee ``playing hardball with the city. This is the Plan B if we can't come to an agreement with the city on the $200 million. It's going to add extra pressure.''

On Wednesday, an MTA board committee approved a modified spending plan for $666 million in transit construction funds that includes three new Valley projects worth $3.3 million.

The Daily News had reported three weeks ago that only a tiny portion of the projects being built countywide were slated for the Valley, leading to an outcry by local leaders.

The committee agreed to spend $2.05 million to buy a permanent site for a bus transit hub in Warner Center; $870,000 for street-scaping the Encino central business district; $435,000 to build a railroad crossing connecting Mason Avenue between Nordhoff and Plummer streets in Northridge; and $283,000 for a bicycle station at the Chatsworth Metrolink train station.

Under the initial plan, Valley projects would have totaled only about $5 million, though numerous other projects are headed to surrounding areas such as Burbank, Glendale, Santa Clarita and the Antelope Valley.

``I'm pleased and it's a good thing, but the total value (of the additional projects) is infinitesimal compared to the total project amounts being funded in the call for projects,'' said Yaroslavsky, an MTA board member.

Yaroslavsky said part of the problem with the Valley getting shorted in the funding process lay with the MTA's indifference to the region, but another part of the blame lay with the city, which proposed relatively weak projects for funding.

``I think the city of Los Angeles and the (city) Department of Transportation needs to be more aggressive, more strategic in its thinking,'' Yaroslavsky said. ``They were outhustled by other cities and regions of the county.''

Two Los Angeles council members, Hal Bernson and Laura Chick, who were loudest in their criticism of the original funding awards, were out of town, but aides welcomed the decision.

``This is a very important step and very important transit improvement for the West Valley,'' said Ken Bernstein, Chick's transportation deputy. He said the Valley is ``still well short of what other areas have received,'' but was pleased that the agency was doing more.