Scant Funding for Highways Leads Some to Consider Tolls

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With federal and state financing for road projects drying up, local transit officials and legislators are proposing to sell bonds and turn to the private sector to fund the building of toll highways, including some in Los Angeles County.


In Sacramento, Gov. Arnold Schwarzenegger introduced legislation late last month for public-private partnerships that would allow roads to be constructed or expanded with bond financing, which would be paid back with user tolls.


“The money we have available right now is woefully inadequate to meet our needs,” said state Assemblyman Joe Canciamilla, D-Pittsburg, who is carrying Schwarzenegger’s legislation. “There just aren’t too many other options.”


In Washington, two senators are proposing to sell $30 billion worth of “Build America Bonds” to finance highway projects. The concept is similar to the war bonds that helped fund World War I and World War II.


If passed, these two programs could inject hundreds of millions of dollars into the state’s depleted transportation coffers, allowing long-dormant projects to move forward. Among the local proposals are truck-only toll lanes along several freeways and a $3 billion “toll tunnel” through the San Gabriel Mountains.


But the concept will have to win over skeptics like L.A. County Supervisor Zev Yaroslavsky, who sits on the board of the Metropolitan Transportation Authority.


“We pay a lot of money in gas tax to pay for these highways and that money has been ripped off … to balance the state’s budget,” he said.


While Schwarzenegger is only proposing tolls for new roads or lanes, Yaroslavsky said the plan opens up the possibility of future attempts to put tolls on existing roads which he opposes.


In Orange County, toll roads have met with mixed results.


Several years ago, the San Joaquin Hills Toll Road from Newport Beach to San Juan Capistrano came close to bankruptcy as revenues fell short of required bond payments. The county agency in charge of the road had to merge its financial operations with a more profitable toll road to stave off collapse.


Meanwhile, toll lanes privately built in the middle of the Riverside (91) Freeway ran into a buzz saw when it was revealed that the California Department of Transportation gave up the right to make improvements to the free lanes of the freeway. The agreement was scrapped and state legislation required Caltrans to take back control of the toll lanes.



Funding detour


Canciamilla said he was prompted to carry the legislation because of repeated diversion of Proposition 42 gas tax dollars to state general fund coffers. Since voters approved the measure in 2002, no money has gone into transportation projects. (The diversions are allowed under the measure when the state runs a budget deficit.)


One proposal calls for a truck-only toll lane from ports of Los Angeles and Long Beach to the Barstow area. The lanes would likely go along the Long Beach (710), Pomona (60) and the Ontario/ Barstow (15) freeways.


“With our traditional sources of funding drying up, the purpose behind this is to get private sector involvement,” said Philip Law, an associate transportation planner for the Southern California Association of Governments, which is working on the proposal.


The Reason Foundation has proposed building a $3 billion “toll tunnel” through the San Gabriel Mountains connecting Glendale and Palmdale to lessen traffic on the Antelope Valley (14) and Golden State (5) freeways.


It also proposed adding privately financed toll lanes on the 101 (Hollywood/Ventura) Freeway from Woodland Hills to downtown Los Angeles and a toll-backed tunnel to complete the extension of the Long Beach (710) Freeway.


The Reason Foundation has close ties to the governor. Its January report was the basis for Schwarzenegger’s highway proposal.


Meanwhile, the federal deficit has prompted legislators to search for additional revenues to address the nation’s infrastructure backlog.


The “Build America Bonds” proposal will create more than one million jobs while “improving the country’s transportation system at the same time,” Sen. Ron Wyden, D-Ore., in a floor speech as he introduced the measure last month, along with Sen. Jim Talent, R-Mo.


Under the program, bond revenues would be treated the same as other budget revenues: projects from across the nation would compete to be included in annual appropriations. Each state would be guaranteed at least $150 million in bond funds; the remaining $23 billion would be distributed through the traditional Congressional appropriations process.

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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