Property Taxes Would Be Used to Finance Improvements : County Takes Step Toward Forming Freeway Agency

Orange County transportation officials moved closer Monday toward establishing a first-of-its-kind agency that would use property tax funds to finance freeway improvements.

The Orange County Transportation Commission directed its staff to develop a plan for an economic study of the proposed “freeway authority” and then meet with officials of Orange County cities, who have been resistant to the concept.

The freeway authority would capture about $25 million annually in property-tax funds that currently are divvied up among the cities.

The authority would raise funds in a way similar to city redevelopment agencies: by taxing the amount a property has increased in value due to new development.

Stan Oftelie, Orange County Transportation Commission executive director, said he will meet with the Orange County City Managers Assn. after his staff prepares a plan for the independent economic study.

The city managers have been “very skeptical, and the reason is that the additional revenue (that would be raised by the freeway authority) would come out of the agencies they manage,” Oftelie said.

But he said he will argue that, as with redevelopment, cities can benefit through the works of the new freeway agency.

The construction of improved transportation facilities can increase property values, which will produce more property-tax revenue for the cities, Oftelie said. And establishment of the agency could forestall a tax hike, he said.

“The Transportation Commission has said it would rather redistribute existing revenue than raise taxes” to improve freeways, Oftelie said. The economic study would explore the financial impact and benefits of the freeway authority, he said.