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Reason Foundation

Metro Investment Report

Cutbacks In Public Transit Funds Should Compel Acceptance Of User Fees For Transportation

Budget bust should compel acceptance

Robert Poole
April 24, 2003

Transportation planning agencies across the state are reeling from the funding cutbacks stemming from the state's unprecedented fiscal crisis. Nearly all the major transportation projects in the Bay Area have been put at risk of years of delay, including the $3.8 billion extension of BART to San Jose. Here in the Southland, Caltrans expects major delays in the much-needed addition of HOV lanes on the gridlocked 405 in West LA, and OCTA has scaled back plans for adding HOV lanes to the Garden Grove Freeway.

And those are just projects that were already in the pipeline. Major new initiatives-the long-delayed missing link on I-710 through (now beneath) South Pasadena, truck lanes for the overburdened Long Beach Freeway, and a new corridor between Riverside and Orange Counties-all begin to look like wishful thinking in today's fiscal climate.

Yet that doesn't have to be the outcome, if we follow some lessons from California and other states during the 1990s. Ours was the first state to enact a public/private toll roads law, AB 680 (in 1989). Orange County also pioneered self-help transportation financing by creating the Transportation Corridors Agencies to add billions of dollars in otherwise unaffordable highway capacity. More recently, Florida, Texas, and Virginia have enacted second-generation transportation partnership measures, encompassing the best of both Orange County models. It's time we took a closer look at the potential of going this route in 21st-century California.

Former Sen. Quentin Kopp made transportation history several years ago with his SB 45, which decentralized 75% of transportation investment decisions to lower levels of government-the MPOs and RTPAs. But what was not decentralized was the ability to impose user fees for transportation. SCAG and MTA, for example, are exploring the idea of a toll tunnel for the I-710 missing link-but they have no authority to authorize such a toll or to issue toll revenue bonds. Likewise for a proposed Riverside-Orange County tunnel or proposed toll-supported truck lanes on selected LA-area freeways. Or for HOT lanes on any number of freeways where the addition of HOV lanes would be extremely expensive (e.g., the 405 in West LA).

The need for devolving state power to levy transportation user fees and to create public-private partnerships was one of the key themes of a recent conference, "Beyond Crisis: The New Generation of Transportation Financing in California," held March 7 by the new Center for Urban Infrastructure of UC-Irvine. In both plenary sessions and breakout sessions, this theme came up again and again. It was clear to most of the 250 transportation experts that we cannot solve California's major transportation problems without significant new investment, including some multi-billion-dollar projects. But there is no way that such sums can be made available via the existing transportation planning process.

Several members of the legislature have introduced bills recently to revive 1989's AB 680, which was terminated by the legislation authorizing OCTA to buy up the 91 Express Lanes project. But simply reviving this pioneering but flawed measure would be inadequate. That law authorized private toll roads, not true public-private partnerships. It required 100% private funding, rather than a mix of public and private capital (as encouraged by federal law and exemplified by more recent measures in other states). It authorized only Caltrans to enter into such agreements, rather than regional transportation agencies. So one approach would be to either adapt, say, the Texas or Virginia public-private transportation acts, or to do a wholesale revision of the old AB 680.

Robert W. Poole Jr. is director of transportation studies and founder of the Reason Foundation.


Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy


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