On the Road to Nowhere

California's highway plan excluded private sector

Fifty years ago this week, President Dwight Eisenhower signed a bill creating our nation’s Interstate highway system. Today, that system is aging and in desperate need of repair and expansion. And nowhere are those needs more evident than in California.

In terms of time wasted in traffic delays, the San Francisco-Oakland area ranks second-worst in the country, with the average traveler losing 72 hours a year – nearly two full work weeks spent sitting in traffic. Only in Los Angeles do commuters suffer worse delays. And San Jose’s annual backups now rank 11th-worst.

For more than two years, experts on the state’s transportation crisis have urged California to join the nationwide trend of tapping into private capital for needed highway improvements. And the legislative compromise that got the $37 billion infrastructure bond measure ($20 billion of it for transportation) onto the November ballot included a provision that would allow four such public-private partnership highway projects.

Unfortunately, California continues to stack the deck against itself, and we’re likely to see other states attract private money for their roads while our traffic jams worsen. The need for investment in our roads is enormous. California’s highways and freeways are overloaded, and the state is expected to add one-third more people by 2030, most of them in the three largest urban areas. The long-range transportation plans of these three regions (the Bay Area, San Diego and Los Angeles) propose to spend $384 billion between now and 2030 – yet after all that spending, traffic congestion will actually be worse than it is today.

Most of those billions will be spent operating and maintaining highway and transit systems, expanding transit, and making some modest lane additions to some freeways. And the $20 billion transportation bond, if it passes, will be distributed to every part of the state, making little real impact on large metro areas such as the Bay Area.

The kinds of major projects that would offer meaningful congestion relief are in the multibillion-dollar range, unaffordable with current funding sources. In the Bay Area, such projects include truck-only toll lanes from the Port of Oakland to Interstate 5 in the Central Valley (projected cost: $9 billion) and a complete network of high-occupancy toll lanes connecting the region’s major freeways (projected cost: $6 billion).

Truck-only lanes would remove a significant percentage of heavy trucks from clogged Interstates 880 and 580, reducing congestion and increasing safety for motorists. The network of high-occupancy lanes, which would guarantee a free-flowing toll lane moving at the maximum speed limit on all major freeways at all times, is in the Metropolitan Transportation Commission’s long-range plans but is at least decades away due to a lack of funding.

If built, the network would provide congestion relief for drivers and a reliable, high-speed path for region-wide express bus service and emergency vehicles. Yet another innovative idea, briefly studied by city officials a decade ago, would be to put Highway 101 underground in San Francisco, providing a nonstop link between the Golden Gate Bridge and the end of the freeway. This would allow Van Ness to be reclaimed for walking, cycling and local auto trips.

Private companies would be willing to pay for these projects, just as they are backing similar projects in Europe and Australia. On the outskirts of Paris, a public-private partnership is building a $2 billion, double-deck car tunnel beneath historic Versailles. Last year saw a public-private partnership build the world’s highest bridge, the Millau Viaduct, a 1 1/2-mile long, 800-foot high, $536 million project in France.

Similar partnership deals are drawing billions in private investment to states like Florida, Texas, Virginia and Georgia. Private companies are investing nearly $2 billion to add high-occupancy toll lanes near Washington, and $7.2 billion to build toll roads from Dallas to San Antonio. There are more than $25 billion in public-private projects planned or approved in the United States, and Utah became the 21st state to enact legislation allowing highway public-private partnerships.

So how did the California Legislature respond to this opportunity to tap into much-needed private capital? Instead of following Utah and other states that enacted legislation to attract private investors, the California measure allows only four pilot projects and requires legislative approval for each project.

Florida tried that approach. It passed a public-private partnership law in 1991, but for 13 years, not a single project got done. Why? The risk was too great. Would you have team of engineers and finance people spend months and tens of millions of dollars preparing a highway design and working out the finances, only to risk having the state legislature reject the plan on a whim? Of course not. Florida saw the light and removed the legislative approval step, requiring only normal state Department of Transportation approval.

“There is no question that California would benefit tremendously from enacting the necessary legal reforms to facilitate public-private partnerships,” Secretary of Transportation Norman Mineta said recently, adding that private companies in the road business view the state as “the most attractive investment opportunity in America, if not the world.”

Ironically, California once was at the forefront of this public-private partnership phenomenon. In 1989, the legislature passed AB680, authorizing up to four toll roads as pilot projects. We learned what to do, and what not to do, from the two projects that were built, the Highway 91 express lanes in Orange County and San Diego’s South Bay Expressway.

And other states learned too. Just about everyone in transportation circles, except the California Legislature, knows how to encourage – and get – private investment in highway projects.

The transportation bond issue on the November ballot will provide a modest down payment on the enormous investment California needs to start coping with today’s traffic, and the addition of one-third more people and 50 percent more trucks over the next 25 years. But unless the state can figure out a way to involve the private sector, billions in global capital will continue to build and improve highways in other states while Californians spend more and more time sitting in traffic jams.

Robert W. Poole Jr. is director of transportation studies at Reason Foundation. He has advised the last four presidential administrations and served on the Bush-Cheney transition team. An archive of his work is here and Reason’s transportation research and commentary is here.