Commentary

Reason.org
April 10, 2006

It's Time to Tackle California's Traffic Crisis Head On—Privately
State funding isn't needed for major projects to be built
By Samuel R. Staley, Ph.D.

Gov. Arnold Schwarzenegger's $68 billion infrastructure bond package didn't make it past the Legislature or onto the June ballot, leaving traffic-weary Angelinos to wondering if we'll ever reduce the congestion that plagues Southern California and wastes $12 billion per year, according to the Texas Transportation Institute.

The perennial pilfering of transportation funds and a lack of priorities in budgeting has helped hammer California's transportation system to the bottom of national rankings. Eighty-three percent of the state's urban interstates are now congested, up from two-thirds in 1984. And the percentage of California's urban interstates considered to be in “poor condition” has more than tripled during that span.

Throw in the 15 million additional people expected to arrive in California by 2030, and we literally won't be able to get anywhere without sitting in traffic. If ever there was an occasion to stop this spiral of traffic jams and infrastructure decay, it is now.

Last year, private companies paid $1.8 billion for a 99-year lease on a 7.8 mile toll road in Chicago. This month the Indiana legislature approved a $3.8 billion deal for the Indiana toll road. And proposals for investor-built toll roads are now being negotiated in Florida, Georgia, Oregon, Texas, Virginia, and other states.

By letting the private sector marshal its resources in capital markets, these governments see infrastructure investments as the assets they are, not the spending liabilities they have become in Sacramento.

California needs to add capacity to existing roads and it needs new roads. Clearly, the state isn't going to come up with the needed cash. Should we wait until it is faster to walk from Orange County to LA or should we let the private sector help reduce traffic?

A detailed Reason Foundation analysis shows some of the most desperately needed projects in the state can be built, and maintained, largely without taxpayer dollars. For example, truck-only toll lanes linking the ports of Los Angeles and Long Beach all the way to the Nevada state line along I-15 would dramatically reduce congestion by diverting freight traffic throughout Southern California and could be built without taxpayer money. All of the $10 billion cost would be covered through toll revenue bonds based on the tolls which truckers and businesses would be willing to pay because it would get them out of traffic and help them meet the demands of today's real-time business inventories.

Likewise, a tunnel linking Palmdale and Glendale would shorten commutes to Pasadena and downtown LA, while also helping Palmdale's airport get major airline services – which would provide relief for the region's other airports. Again, toll revenues – not taxpayer dollars - would cover all of the costs if the project was completed in two phases, or 83 percent of the costs if built all at once.

These are just a few examples of mega projects where private companies would be willing to pay to build roads for Californians. Drivers who choose to use the roads pay tolls. If you don't want to pay tolls, you don't pay. But you'll still get the benefit of fewer cars in the existing lanes.

The collapse of the transportation bond initiative in Sacramento came as little surprise to political pundits. The only real solution is to take politics out of transportation. Public-private partnerships have the ability to prioritize projects and fund them without taxpayer money through private capital markets. California can build the large-scale road projects it needs – without taxpayer dollars – if it just will embrace the road financing methods that other states have already figured out.

Samuel Staley, Ph.D., is director of urban and land use policy at Reason Foundation) and co-author of an upcoming book on mobility and transportation policy (Rowman & Littlefield). An archive of Staley's research and commentary is here. Reason Foundation's California research and commentary is here and Reason's transportation research is here.