This opinion piece originally appeared in the Orange County Register
By the end of this year, the new variably priced express lanes are scheduled to open on 14 miles of highly congested I-405 in Orange County. Skeptics may claim that only a few motorists will be willing to pay a $9.95 toll to go the entire way at rush hour, or that so many motorists will squeeze into the lanes that they won’t offer faster trips and should’ve just been regular, toll-free lanes. Those same claims were made when the world’s first express toll lanes opened to traffic in 1995 on State Route 91 in Orange County. That project has been a huge success and still offers Southern Californians faster and more reliable trips on a generally congested freeway 28 years later.
Orange County’s pioneering SR 91 Express Lanes project has inspired scores of similar projects nationwide. More than 60 express toll lane projects are now in operation in the United States, including in Atlanta, Seattle, and the suburbs of Washington, DC. And many more toll lanes are in the pipeline as states and major cities try to alleviate traffic congestion and improve their infrastructure.
In addition to providing faster and more reliable travel times for motorists, express lanes in many metro areas have also enabled faster and more reliable express bus service using those lanes. When the first such lanes opened on I-95 in Miami, long-distance express bus service from Fort Lauderdale to Miami quadrupled in the first five years.
With many successful projects, the Orange County Transportation Authority (OCTA) has plenty of best practices it can emulate. For example, OCTA followed the universal practice of requiring transponders and pre-paid accounts to use the lanes to keep its collection costs low. To be consistent with other Southern California express lanes, the 405 express lanes will offer discounts and exemptions for some carpools and clean-air vehicles, including electric cars.
One decision OCTA may regret is using pre-set toll rates for different hours of each day. That is consistent with long-established practices on the 91 Express Lanes. But most other successful express lanes in California and nationwide use dynamic pricing—toll rates are adjusted every five minutes or so based on how many vehicles use the lanes. When traffic increases, the tolls increase to ensure the lanes remain free-flowing for those using them, making promised time-savings and reliability more consistent.
Another best practice for express lanes that involve major construction, in this case, $2.1 billion for the 405 project, is to use long-term financing. This is standard practice for express lanes procured as long-term public-private partnerships, like the original 91 Express Lanes, but also for large public-sector projects, including Riverside County’s 91 Express Lanes and Colorado’s C-470 Express Lanes. For the 405 Express Lanes, OCTA obtained a federal Transportation Infrastructure Finance and Innovation Act (TIFIA) loan, which will be paid off over several decades from toll revenue generated by the lanes.
Critics of express lanes are often skeptical that bond buyers will ever be paid what they are owed—but they are wrong. Nearly all express lane projects that have been financed based on their projected toll revenues have investment-grade bond ratings. A 2022 report from Fitch Ratings shows that all 14 such projects they rate have ratings of BBB or higher. The grandfather of them all, Orange County’s 91 Express Lanes, is rated A+.
Another criticism that continues to be raised is that toll lanes serve only the wealthy, hence the regular moniker “Lexus Lanes.” That premise was shown to be false several years ago by researchers at the University of Washington. The study examined who uses the express lanes on I-405 in the Seattle metro area. Researchers found that the lowest-income group received the most significant net benefits (the value of their time saved versus the cost of the toll) from using the express lanes. The lowest-income group used the express lanes less often than other groups but did so when it was essential for them to get somewhere on time, such as to pick up a child at daycare before late fees kick in.
Priced express lanes like those pioneered in Orange County have acquired a nationwide fan base because they deliver more reliable travel times, improve mass transit services and give drivers a congestion-free alternative when they need it most. It’s nice to see the I-405 express lanes project nearing completion. Hopefully, the rest of Southern California is watching and recognizing the value express lanes could deliver to many of the region’s other congested freeways.
Robert Poole is director of transportation policy at Reason Foundation. He advised Caltrans on the original 91 Express Lanes project and several other state transportation departments on priced lanes.