Traffic fixes hobbled by limit on tolls
IN 2017, the state Legislature curtailed the use of tolling and public-private partnerships to pay for much-needed Texas highway infrastructure, first by declining to approve any proposed highway project funded via a public-private partnership, and second, by prohibiting the Texas Department of Transportation from investing state equity in any of such partnerships, known in the industry as P3s.
What’s more, Gov. Greg Abbott pledged that none of the new infrastructure funding approved by voters in 2015 would be used for tolled projects.
TxDOT and local officials in much of the state had fought to save these projects, most of which involved express toll lanes, such as those already providing congestion relief in Austin, Dallas and Fort Worth. In fact, the Texas Transportation Commission and TxDOT had developed a workaround that would use voter-approved highway funds for the general-purpose lane portions of highway projects and retain conventional P3 financing for the priced lanes.
Dubbing that an “accounting trick,” grass-roots populist groups demanded Abbott rein in the transportation commission and TxDOT. Later the governor issued a statement that TxDOT was doing a good job on congestion-reduction, but added, “We want them to do that in a way as I promised, and that is without adding more toll roads.”
Last December, the Texas Trans-
portation Commission, whose members are all appointed by the governor, voted unanimously to remove all toll projects from the 2018 Unified Transportation Program. At least for now, that kills planned mega-projects to add express toll lanes to I-35 East in Dallas, I-35 through Austin and many others. The irony in these actions is the stunning success of the publicprivate partnership express toll lanes projects in Dallas and Fort Worth. The North Tarrant Express has reduced time spent in traffic in the general-purpose lanes by as much as 73 percent while increasing average speed by 10 percent to 15 percent. Similar congestion reductions are being achieved on the LBJ project in Dallas. Meanwhile, anti-P3 groups, such as Texans Uniting for Reform and Freedom and Texans for TollFree Highways, urged Abbott to take action based on claims that tolled express lanes are unaffordable for working class Texans, and that an average round-trip $5 toll each week, at $50 per week, would cost $135,000 over a commuter’s lifetime. But that is not how most people use these lanes. Most users’ bills average between $5 and $15 per month. Regular commuters on those expressways average only $35 per month, choosing the toll lanes for some trips and not for others. The groups also claim Texans don’t want more toll lanes. And they present all new projects as if they force drivers to pay tolls, when, in fact, all of these projects add new capacity to congested corridors, leaving motorists free to choose whether the time savings and reliability of the toll lanes are worth the price for any given trip. That should undercut the constant repetition of these groups’ favored term: “toll taxes.” That’s because there is difference between a toll (a user fee) and a tax (government revenue). Express tolls clearly are user fees. As for the alleged unpopularity of tolled projects, that, too, is incorrect. One year after completion of the Tarrant County project, 70 percent of its users ( of both general purpose and electronic toll lanes) gave it a favorable rating. LBJ highway users rated that corridor even higher after one year, at 76 percent.
Liberty County officials and citizens strongly support the toll-financed completion of the last 50 miles in the Grand Parkway, the Houston metro area’s outer beltway. In Montgomery County, north of Houston, there is major support for completing the 249 Tollway. And officials in the DallasFort Worth Metroplex are agonizing over how to complete the majority of the long-planned network of express toll lanes — without either tolling or public-private partnerships — as are capital residents and officials desperate for long-term congestion relief on I-35 through downtown Austin.
Fortunately, there is a ray of hope in Texas.
Texans for Traffic Relief is a pro-tolls, pro-P3 group, that supports the use of all available resources to fund roadway projects and empowering local communities to decide how they want projects done. TTR further wants to ensure that taxpayers are protected in in a P3 project bankruptcy, and it opposes converting existing roadways to tollroads. Organization leaders applauded the State Republican Executive Committee for including a proposition on the March Republican primary ballot regarding voter approval for toll projects.
The case for toll-financed P3 projects is strong.
First, under the revenue-sharing provisions built into Texas P3 agreements, TxDOT garners increasing shares of gross toll revenues in the out years if tolled projects do better than projected. Second, to the extent that they are profitable, these projects pay state and federal corporate taxes. The private-sector transportation infrastructure company Cintra estimates the net present value of such tax payments (through 2062) at $3.5 billion on the NTE and LBJ projects alone.
Unfortunately, many of the legislators enacting anti-toll and anti-P3 provisions evidently believe the many incorrect assertions made by anti-P3 groups. It will take an active public campaign of accurate information for Texas to be able to resume this cost-effect means of providing urgent relief for gridlocked highways. A longer version of this essay first appeared in Public Works Financing. Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation. An MIT-trained engineer, he has been an advisor in four U.S. presidential administrations.