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** Orange County’s $649 million Trolley to Nowhere
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Dear John,
California’s bullet train may be the state’s most high-profile transportation money-sink, consuming a projected $135 billion with no clear path to the finish line. However, taxpayers shouldn’t overlook the other transit boondoggles torching public funds. Chief among them is Orange County’s 4.15-mile OC Streetcar ([link removed]) : proof that you can pour high-speed-rail-style money into a monument to tunnel vision.
The streetcar line from Santa Ana to Garden Grove was sold as a transformative link to connect neighborhoods, employment hubs, and transit centers. Yet as the project moves toward its delayed 2026 opening, its ballooning costs, questionable utility, and adverse impact on local businesses make it a case study in bureaucratic mismanagement and fiscal irresponsibility.
Last month, the 2024-25 Orange County Grand Jury report ([link removed]) released its scathing assessment of the OC Streetcar project’s operational and financial mismanagement. Initially projected to cost $250 million ([link removed]) in 2015, the project cost has now reached $649 million, a 2.6-fold increase that could climb even further. That’s a staggering $156 million per mile, almost twice the cost of the next highest streetcar project: the (Washington) DC Streetcar at $83 million. ([link removed])
Because the OC Streetcar was funded partly by Orange County’s Measure M2 (OC Go) ([link removed]) half-cent sales tax, it placed an extra burden on local taxpayers. And every future overrun will be 100 percent funded by local money. The Grand Jury report warns that the Measure M fund is already overextended with its project list adding up to 104.5 percent of revenue allocations.
And while Covid-19 has been a convenient excuse, the report is highly critical of Orange County Transportation Authority’s (OCTA) failure to anticipate issues like contaminated soil, Native American remains, and aging utilities that have contributed to delays and cost overruns.
OCTA’s pre-Covid projections of 6,000 to 7,500 daily streetcar riders, already modest for a $649 million investment, now seem highly optimistic. Santa Ana, the streetcar’s primary service area, has seen its population decline over the past decade — from 326,626 ([link removed]) in 2015 to 315,325 ([link removed]) in 2025. Further, Metrolink, the regional rail system that the streetcar is designed to complement, has itself seen a significant decline in ridership. The combined average weekday ridership on the Orange County Line and Inland-Empire Orange County Line has fallen over 50 percent from pre-Covid levels of 14,892 ([link removed]) in Q2 of 2019-20 to just 7,121 ([link removed]) in Q2 of 2024-25. This
massive decline in rail usage undermines the project’s foundational assumptions.
Even at its peak projected ridership of 7,500 daily passengers, the streetcar would drive a mere 0.015% reduction in Orange County’s annual vehicle miles traveled. At full build-out: ten stations stretched across 4.15 miles, the streetcar will carry about as many people per day as a single arterial bus line in neighboring Los Angeles County. As the Grand Jury report rightly states: “this is an extraordinary amount of money for a project that will serve a tiny fraction (less than ¼ of 1%) of the 3.2 million Orange County residents.”
The streetcar’s impact on Santa Ana’s downtown businesses has been catastrophic. The Grand Jury’s report describes the construction as “devastating,” with “confusing street closures” and a “hopscotch method” of road work that has choked off access to the commercial corridor. Santa Ana’s city council was forced to allocate $1.5 million in 2022 to bail out struggling merchants, a cost ultimately borne by local taxpayers.
OCTA’s broader financial picture doesn’t inspire much confidence either. The agency’s last two budgets have had to rely on an annual draw-down of $300-350 million of accumulated reserves ([link removed]) .
OCTA may tout the streetcar as a “zero-emission transit option,” but its environmental benefits are negligible compared to its costs, and its impact on congestion will be minimal — if it’s felt at all.
As the streetcar’s opening looms in spring 2026, Orange County taxpayers are left holding the bag for a project that’s over budget, behind schedule, and out of touch with reality.
— by Athan Joshi, a visiting research assistant at California Policy Center
New Podcast ()
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** Radio Free California #397: The End Is Still Near
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On this week's podcast with CPC president Will Swaim and CPC board member David Bahnsen: Birth rates are falling worldwide, but the Stanford University professor who coined the term “the population bomb” is unmoved by the data. Gavin Newsom confirms his presidential ambitions with a tour of South Carolina, but back home the governor is in retreat on environment, energy, education, and guns. Listen now. ([link removed])
More from CPC ()
** Newsom’s CEQA “Reform” — A Win for Unions, Not a Fix for Housing
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Gov. Newsom signed a housing package with limited CEQA exemptions that he called "game-changing." But the reforms are rigged to benefit union-built projects — excluding most of California’s private construction workforce and doing little to address the root causes of the housing crisis. Read the article ([link removed]) by CPC's Andrew Davenport.
** Illegal Alien Medi-Cal and the Big Beautiful Bill
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California dodged a $3.5 billion hit to its Medi-Cal funding. The House version of the Big Beautiful Bill would’ve slashed federal support for states that offer health benefits to illegal aliens — but that penalty didn’t make it into the final version. Still, California isn’t totally off the hook: it now has to cover a bigger share of emergency room visits for illegal immigrants, and that will add up fast. Read the analysis ([link removed]) by CPC visiting fellow Marc Joffe.
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