User Fees and Sales Tax Dollars Finance $1.9 Billion Four-Lane Freeway Widening

[Updated August 17, 2017] The express lane portion of Orange County Transportation Authority's $1.9 billion, I-405 Improvement Project (SR-73 to I-605) is a study, to some degree, of the difference between user fees and highway subsidies, a term I apply loosely to all general sales tax measures, and the usefulness of the U.S. DOT's Transportation Infrastructure Finance and Innovation Act (TIFIA) program.

Thanks to the passage of Measure M2 in 2006, all taxpayers in Orange County, the third-most populous in California, will pay for the $1.1 billion widening of the San Diego Freeway (I-405) to provide a general purpose lane in each direction for 16 miles from approximately SR-73 in Costa Mesa to I-605 in Seal Beach [see map (png)].

"OCTA officials said the [$629 million] loan has a low interest rate that’s expected to save taxpayers about $300 million over its 35-year life, compared with traditional bond financing," reports Bradley Zint for the Daily Pilot. "The loan will be repaid using revenue from the new toll lanes, the agency said."

[Correspondent's note: While Orange County's I-405 Express Lanes will charge a variable toll, dependent upon congestion levels to single-occupant vehicles, they should not be confused with the more appropriately named I-405 Express Toll Lanes found in Washington state.]

In addition to the $1.1 billion in local sales tax revenue and the $629 million TIFIA loan, the project received:

• $45.6 million in federal funds
• $89.7 million in state funds

"It’s expected the project will begin construction by early next year with completion anticipated for 2023," according to OCTA.

What happened to tollway rebellion?

Double toll lanes did not come easily to this project.

"Better that the Orange County Transportation Authority do it than Caltrans, stated then-OCTA chair and Irvine city councilman Jeffrey Lalloway in a May 2015 post, referring to a July 2014 decision by the state that the widening must include an express lane, a decision which did not go down lightly with then-Huntington Beach Mayor Matthew Harper:

"The state of California and those in Sacramento are trying to implement a concerted agenda to have layers of taxes, fees and tolls to extract dollars out of everyday drivers," he said. "I think once voters realize what's coming down at them, they're going to rebel and people are going to want to keep the freeways free."

Hours of operation and carpool treatment

Unlike their counterparts in the Bay Area, many Southern California express lanes operate by more rigorous rules.

"For the first 3½ years after the 405 express lanes open, single drivers using them will pay a toll at all times, OCTA said," adds Zint. "Carpools of two people will be able to use the lanes for free during non-peak hours, and carpools with three or more people will be free all day."