MTA QUESTIONS ARNOLD'S PLAN TO WITHHOLD TRANSIT FUNDS.

Byline: SUE DOYLE Staff Writer

With the MTA already considering fare hikes to reduce its deficit, officials are grappling with news that Gov. Arnold Schwarzenegger wants to withhold $100 million they'd counted on to build transit projects in the nation's most-congested area.

The governor's proposed $143 billion budget for the upcoming fiscal year would divert about $1.1 billion statewide from public transit to other programs -- a decision that could force the Los Angeles County Metropolitan Transportation Authority to consider bonds, toll roads, tax hikes and other fundraising alternatives, officials said.

``We've underinvested (in infrastructure) for a long time, and now the congestion chickens have come home to roost,'' Jack Kyser, chief economist for the Los Angeles County Economic Development Corp., said Monday. ``It's going to be very, very difficult to get out of this.''

The MTA had expected $100 million in surplus gas-tax revenue and had planned to use it to wipe out most of the $104 million deficit projected for fiscal 2007-08, officials said.

With that money diverted to other programs, the agency will have to find creative ways to close its budget gap while identifying funding for new transit programs, such as an extension of the Red Line subway from mid-Wilshire to Santa Monica, said Terry Matsumoto, the MTA's financial services chief.

``We have a severe problem anyway, and this doesn't help us,'' said Matsumoto, adding that MTA board members and lobbyists plan to fight the cuts.

Even before Schwarzenegger released his proposed budget last week, the MTA was debating raising fares and reconfiguring bus lines to help catapult it out of debt.

An MTA subcommittee had scheduled a debate for Wednesday on fare increases and route changes, but that was dropped to be replaced with a board workshop next month on the MTA's stubborn deficit.

Bob Stern, president of the nonpartisan Center for Governmental Studies in Los Angeles, questioned why Schwarzenegger, who has made the environment one of his top priorities, would divert money from projects that could help reduce smog and greenhouse gases.

``The problem is that he's saying the right things in terms of mass transit, but how do his actions translate?'' Stern said.

Schwarzenegger aides did not return phone calls for this story.

Meanwhile, transit agencies and politicians need to find alternative funding to keep the region moving, such as raising taxes or petitioning for more bond revenues, Kyser said.

sue.doyle(at)dailynews.com

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