Yaroslavsky Assesses State Budget's Impact On Health of County Finances

Zev, we do this interview in the midst the Legislature's effort to consider the May revision of the budget proposed by the Governor. One of the sticking points re the May Revise is an agreement between the Governor and the League of Cities which would protect local government revenues from raids by the state. Assemblyman Steinberg, with bipartisan support, is suggesting that without the adoption of structural reform of state/local finances, he may not go along with that deal between the Governor and the League. What is your position, the county's position and CSAC's position re contentious issue?

I don't know that the county has a position. My position is that the most important thing that needs to come out of this budget session is guaranteed ongoing revenues for local government. If Assemblyman Steinberg and the others who want to take the reform issue a notch higher are not able to succeed, I would certainly hope that they do not torpedo what is most important for all local governments right now-to be free from the threat of the state taking local government money every time the state has a budget problem. That is my hope.

The League of Cities is saying that they have no need to talk with the Legislature. The deal they struck with the governor is their bottom line and nothing more. Assemblyman Steinberg, Senator Burton and Chris Norby, the supervisor from Orange County, are saying that they cannot agree to lock in the current dysfunctional state-local fiscal arrangement without getting some reforms in the structure. Again, how do you analyze the situation?

If Assemblyman Steinberg and the others can engage local government, the cities and counties, and get them to agree, that would be great. I don't think that anyone in local government is averse to engaging in a discussion, but all of us have to be realistic about what the hurdles are. At this point, it would be a mistake to threaten or blow up this deal over this reform. It's more important to lock up fiscal responsibilities for cities and counties than it is to do anything else. You can always come back and do other reforms later. I think it's going to be difficult to get local government to agree to some of what Assemblyman Steinberg wants now.

What is the impact on the county of the Governor's May budget revisions.

If the governor's deal goes through, it's a sound deal for us. We will have to absorb a fiscal hit this year and next year. But in exchange, we get a stable ongoing source of revenue into the future. That's the deal. The May revise is much more acceptable to us than the governor's original budget in January because it takes us from a potential $300 million loss to something like a little over $100 million loss, which makes a big difference to LA County. We don't like having our local dollars taken by the state for any reason. But if we have to, the package that was negotiated appears to be as sound as we're going to get.

Zev, lets turn to the MTA, which you chair this year. The federal transportation reauthorization bill has been held up in Congress, but the MTA still has had some funding successes. Could you recount what the MTA has been able to accomplish re funding and management?

It has been an eventful year, and on balance, a good year for the MTA. We started out having to withstand a terrible strike, which ended with both parties agreeing to non-binding arbitration, the results of which have just been released. The MTA fared well in that arbitration and has accepted the results, and so did the mechanics union. Neither side got everything it wanted, but both sides should be able to live with the result.

In January, we changed our lobbying team in Washington and now have a much stronger presence. This month, we finally received the full funding grant agreement (FFGA) for the extension of the Eastside Gold Line through Boyle Heights. That makes the Eastside Line eligible for federal funding. That's an important line for one of the most transit dependent communities of Los Angeles. It will integrate the eastside into the rest of the regional transportation network, which has been our highest priority for years.

We are under construction in the San Fernando Valley on the Orange Line, which is a high-speed busway connecting Warner Center to the Red Line terminus in North Hollywood. We think it is going to be a huge success and a harbinger for the future way in which MTA deals with some of its transit requirements in the outlying areas. This is a very inexpensive and very flexible project, which can be built in a relatively short period of time. We hope to open that in time for school in the Fall of 2005. The Orange Line will integrate the San Fernando Valley into the regional transportation network.

The other major accomplishment of the MTA this year was the beginning of an institutionalized system of budget accountability. We cut $150 million dollars out of the budget. It was the first time the board of the MTA ever undertook an exercise in budgeting over the agency. Up until now, the board has been more of a rubber stamp for staff recommendations. But for the first time this year, the board went through a very rigorous exercise cutting $150 million out of the budget and almost removing the structural deficit it faced going into the new fiscal year. Unfortunately we are laying off over a 100 people. But in the long term, we are trying to right the agency's finances to make it leaner and more focused instead of a honey pot for special interests. The cuts have sent cultural shockwaves through the bureaucracy of the MTA and I think that's a good thing.

In the May revise, the governor went a long way towards restoring some Prop. 42 transportation funds that he originally proposed cutting. Are you pleased with the May revise and are you pleased with the level of state transportation funding coming MTA's way?

We depend a lot on the state and we got wiped out before the May revise. The governor has signaled through his actions that he recognizes that transportation and the building of infrastructure is a priority and needs to be restored. Am I satisfied at the rate at which funding is being restored? Nobody is. But, I understand the problem the governor faces. The state is a key partner with the MTA, as is the federal government. We get a lot of our transportation dollars through the state. We can do a lot if we can get back to the way things were before the budget had a hole blown through it in Sacramento. In fact, the Orange Line is being built with borrowed money that we essentially lent to the state.

Zev, the LAX modernization plan soon will be coming before the supervisors as well as the City Council. The airport's environmental impacts, traffic congestion, cargo and goods movement, land use, and regional mobility needs are all connected to one another, if not politically, at least in the way residents live their lives day-to-day. How might the region get a better handle on integrating these issues/practicalities into a coherent regional transportation plan?

First of all, everyone needs to realize that there is no silver bullet that's going to suddenly turn a congested region into a free-flowing region. We have to be honest with ourselves and with our citizens as to what we can do. Second, in the words of the former mayor of Curitiba, Brazil, "you have to have the courage to try simple solutions." The Orange Line in the San Fernando Valley, using a rubber wheeled bus-train instead of a steel wheel train, is a simple solution-it's inexpensive and can easily be replicated. Exclusive bus lanes in the major thoroughfares of LA, like a Wilshire Blvd, are a must. We have to focus on making these kinds of ideas work.

LA's problem is that it's just too spread out. We're not going to build rail lines to reach all of the communities that have traffic congestion. We've got to have the courage to implement strategies that can be undertaken quickly and affordably.

As a supervisor with regional responsibilities, how do you begin to get the civic and political community to better address our public challenges holistically, whether it's LAX, the harbor, mobility, land use, or air quality? How do we begin to get citizen attention focused on getting better regional results from our public investments?

We have fragmented responsibility; the county is responsible for something, the MTA for others, the city of LA for the airport and harbor, the MTA for regional transportation, the state for highways. All of these governing bodies need to communicate with each other and new legislation should not be required to do so. We just need to get in the same room and talk to each other. Whether it's the city or the county or the MTA, the political leadership has got to send the message to our hired hands that we want results. And, we don't want to hear why we can't do things-we want to know how we can get things done.

We have some good professionals in this region and they ought to be working together on these issues. The elected leadership, both at the city level and the county level, and even from some of the smaller cities, must buy in to a regional approach and turn our professionals loose. We can debate whether we have the right structure and have conferences about governance. In my view, there isn't so much a crisis in governance as there is a lack of will on the part of public agencies to get things done.

There is an old saying, "You can't get into trouble if you don't do anything, because you can't be criticized for doing nothing." We've had too much of that. We need to encourage our department heads and our bureaucracies to take some risks-prudent, intelligent, well thought out risks. At the MTA, they took a risk with the Metro Rapid bus (the red express bus) a few years ago and it has been tremendously successful. We need to have the courage to try new things, whether it relates to integrating transportation with the ports or with the airport or whether it's creating new opportunities at the sub-regional level. There are a lot of things we can do.

Supervisor Knabe has repeatedly advanced the notion of a regional airport authority or some regionalization of the region's airport network's responsibilities, burdens, and benefits. The LAEDC came out in support of Cindy Miscikowski's compromise for LAX with the condition that there be a focus-a white paper-on how the aviation burden can best be addressed regionally. Your thoughts?

The big failure of the LAX plan is that they never talked to anybody. It was all very insular and very top down, in a dogmatic way. They should have engaged other stakeholders in the region-not just governments, but other stakeholders-in the development of the plan, which they did not do. In that respect, what Don Knabe is saying stems from that experience.

The airport spent a fortune developing a plan that had no support. They are no closer to the end result than they were before they spent $130 million. In fact, they will have to backtrack unless the Miscikowski compromise comes to pass, which appears to be happening. The issue with this plan, as well as with most long term planning issues, is communication.