The first phase of Highway 1 widening from 41st Ave. to Soquel Drive is complete. Proposed bonds would help pay for the final stretch between State Park Drive and Freedom Blvd. (Stephen Baxter — Santa Cruz Local file)

SANTA CRUZ >> As cost estimates for highway widening and the Coastal Rail Trail rise, Santa Cruz County transportation leaders on Thursday are set to consider issuing up to $75 million in bonds — and dipping into future sales tax revenues to pay them back. 

The bonds under consideration by the Santa Cruz County Regional Transportation Commission (RTC) include $50 million for Highway 1 widening from State Park Drive to Freedom Boulevard, and $20 million for the rail trail. The commission would pay an estimated $104.2 million to issue and repay the bonds, including interest. 

A staff report discusses a possible second round of bonds in 2028 with an additional $50 million for the highway and $10 million for the trail. 

Measure D

Transportation commission staff first raised the idea of using Measure D for bonds in April 2025 as a needed step to deliver the two long-term projects.

Measure D is a half-cent sales tax approved by Santa Cruz County voters in 2016 for transportation projects. The tax is a crucial source of local match money required to receive grants from state or federal agencies. 

It allocates a set percentage of revenues to various types of projects, including 25% for highways and 17% for active transportation like walking and biking.

The proposed bonds would not change this split, and would not shift money away from transit or road repairs, transportation commission staff have said.

Highway project 

The Highway 1 expansion includes auxiliary lanes between exits, stretches of bus-on-shoulder lanes, and bike and pedestrian overcrossings. The first phase from 41st Avenue to Soquel Drive has been completed, and a second phase from Bay Avenue to State Park Drive is set to finish in 2027. 

A third phase, from State Park Drive to Freedom Boulevard, was added to the highway expansion project when Measure D was amended in 2020. It has received federal and state grants for its construction funding, but also needs Measure D revenue more quickly than the sales tax brings in. 

The California Department of Transportation, or Caltrans, is working alongside commission staff to design and execute the highway expansion plan. In 2024, local transportation activists sued Caltrans over a 2024 environmental review of the highway widening. The suit alleged that the review didn’t consider enough alternative plans, and didn’t show that the project would make the highway less congested. In August 2025, a Sacramento Superior Court ruled in favor of Caltrans and rejected the challenge. 

In a public comment sent to commission staff ahead of the meeting, former RTC Executive Director Linda Wilshusen criticized the bond plan, saying the remaining highway expansion won’t improve congestion and will take away money for other possible highway improvements.

Aside from the 2024 environmental document, she wrote, “There have been no advertised public presentations by either the RTC or Caltrans that provides detailed information about the full costs, construction staging, segmentation, timeline, and/or other factors of interest to the public about the amended-in Highway 1 project.” 

Rail trail 

The bonds under consideration would also allow work to continue on several stretches of the Coastal Rail Trail, including mid-county segments between Santa Cruz and Aptos. In December, after expected costs for the segments rose to create a $72 million shortfall, commissioners voted to move forward with a less-costly trail design that may remove parts of the train tracks or run atop them. Construction on those segments is now expected to begin in 2027 or 2028.

Separately at Thursday’s meeting, commissioners are set to consider a $4.5 million contract for preliminary design and environmental review for a portion of the rail trail from Aptos to Pajaro.

The bonds and the contract are separate from plans under consideration for passenger rail on the Santa Cruz Branch Rail Line. 

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