Ben Wear reported today on the Central Texas toll roads inability to live up to the Traffic & Revenue (T&R) estimates that consultants came up with in 2002, Central Texas toll roads need more state subsidies than expected.
Tolls and other revenue have fallen more than $100 million short of covering debt and operating costs of the state’s three-road Central Texas Turnpike System since the highways opened about four years ago. Texas Department of Transportation subsidies almost 70 percent more than originally predicted have made up the difference.
Those subsidies, covered primarily by state gasoline taxes that otherwise would be available for other road spending, should average about $38 million a year over the next decade and total about $750 million by 2042 , according to TxDOT documents. The system’s first profitable year is not estimated to occur until 2030 , with some years in the red even after that because of major road rehabilitation expenses. [Emphasis added]
Of course one TxDOT commissioner has a great idea to fix this problem.
At least one member of the Texas Transportation Commission, which governs TxDOT, said it is time for the agency to consider ceasing management of toll roads, instead leasing out even existing state toll roads to the private sector.
“Any dollar that we support that system with is a dollar that is taken out of the state of Texas to build and support other roads,” said Commissioner Ted Houghton of El Paso, who has served on the commission since 2003 and has long advocated such agreements with toll road companies. “We need to get out of that business. Find someone who knows how to market those roads, to operate them and collect the tolls. We do it as a sort of side business.” [Emphasis added]
That’s right. I mean what who would expect a “transportation agency” to know anything about running toll roads? And certainly we all remember, back in the day, Mike Krusee and Ric Williamson telling us about the “side bidness” they wanted TxDOT to start running.
All kidding aside, anyone paying attention knew this day was coming, it was just a matter of time. Although TxDOT is still drinking the Kool-Aid – they really have no choice at this ponit.
“Moving forward, I think that the economy is picking up, and I see development such as the Formula One track and ancillary development around the track helping that,” said Mark Tomlinson , TxDOT’s turnpike director.
The F1 track, expected to open next June, will be about a mile east of where Texas 130 crosses FM 812 southeast of Austin. Several large residential and mixed-use projects are also planned for the Texas 130 corridor, but they won’t be complete for 10 to 20 years.
Beyond that, Tomlinson said, the 2012 opening of the southern 40 miles of Texas 130, connecting the Austin area to Interstate 10 east of San Antonio, is likely to boost traffic and revenue. A private consortium headed by a Spanish toll road company is footing the $1.2 billion bill to construct that extension under a long-term lease with TxDOT.
“The picture’s going to be pretty good for the future,” Tomlinson said.
Expenses, meanwhile, have been almost double — about $50 million a year — projections outlined in the 2002 bond prospectus. That includes about $30 million a year to collect the tolls, process billings and pursue collections from late payers.
TxDOT has been working to lower those costs, Tomlinson said. The agency, he said, has shortened hours at the customer service center alongside Loop 1, installed equipment that scans photographs of license plates used to bill customers who don’t pay with cash or have an electronic toll tag, reduced mailing costs and renegotiated its contract with a collections company.
And the agency has taken bids for a new contract for toll operations to be awarded this summer. Review of those bids, Tomlinson said, indicates that lower costs are on the way there as well.
“All toll operations have a ramp-up period,” Tomlinson said. “And they’ll all tell you that their costs are a lot higher in the early years.”
That may be true, but that certainly should have been part of any T&R estimate worth it’s salt. This is really just par for the course. A consultant sells politicians on future growth, drivers as far as the eye can see, and a tollway paved in gold. But reality is much different, and the taxpayers are left holding the bag, again.