December 12, 2006
A shift in thinking on toll roads?

Well, well. It seems that the Texas Transportation Institute study that Burka blogged about last week has had an impact on the powers that be.

For more than a year now, state officials have scared the dickens out of motorists by saying the gas tax would have to go up $1.20 a gallon to build all the roads needed statewide over the next quarter-century.

That would almost triple the 38.4 cents drivers now pay in federal and state fuel taxes. Since that's politically impossible to do, the argument goes, toll roads should be built wherever and whenever feasible.

But now a Texas Transportation Institute study says gas taxes wouldn't have to go up nearly as much.

Just indexing the gas tax to rising construction costs would be enough, the 139-page report says. The extra money could finance bonds through 2030 and pay them all off within five years after that.

Or, to avoid borrowing with bonds, the tax could be increased 12 cents in 2008 and indexed to construction inflation through 2030.

Even if the tax weren't indexed, a flat increase of only 39 cents a gallon would do the same - a far cry from the $1.20 that Texas Department of Transportation officials have maintained would be needed.

Okay, let's clear something up first. The state gas tax is 20 cents per gallon, and has been since 1991. Adding in the federal tax is what brings it to 38.6 cents per gallon overall. Obviously, the state of Texas cannot change the federal levy, so any mods to the gas tax is to the state tax portion of it.

Now then. Having the state tax "go up $1.20 a gallon" means the total tax would be $1.58.6 per gallon, which is not "almost triple" the current tax, it's more than triple; in fact, it's more than quadruple. Perhaps the writer meant "go up to $1.20 a gallon", or $1.38.6 overall, as was first bandied about last year. That's still more than triple the current tax level. Either way, reporter Patrick Driscoll should ask Santa for a calculator for Christmas.

I've been banging the drum about toll road math for a long time now, so I'm glad to see the idea has finally taken hold. I suppose with assumptions like these that TxDOT was making, someone official was going to call them on it sooner or later:

The report, done for the Governor's Business Council, differs from TxDOT's assumptions in three key areas, said Michael Stevens, a Houston developer who's a member of both the Business Council and the transportation study commission.

TxDOT failed to account for how much tax revenues would go up over the 25 years from increased driving, he said, and overestimated unfunded needs for state roads by $8 billion.

And, when calculating the funding gap, TxDOT added an estimated $22 billion for local streets in the eight largest cities, though the state has no responsibility for such roads.

The study concluded that a bloated $86 billion in unfunded needs espoused by TxDOT is actually just $56 billion.

"These numbers are pretty tight," Stevens said. "We study it like we study our businesses. Before we published it, because we knew it was so different, we did a large amount of due diligence on it."

Good to know. As you may recall, that $86 billion figure came from total pie-in-the-sky wishcasting. And even if it were a true amount, that $1.20 gas tax would have raised way more than $86 billion in a decade's time. The whole toll road scheme has been built on faulty premises.

Now it's true, as noted later in the article, that indexing could very well raise the gas tax by a lot in the next 20 years, and that it would hit poor people harder. Both of these things can be dealt with, especially if we stick with the true numbers and not science fiction.

Indexing the gas tax likely would mean fewer roads would need to be tolled, said Rep. Mike Krusee, R-Round Rock, who chairs the House Transportation Committee and co-chairs the legislative study commission.

But a bill he filed last year to index the tax to consumer inflation was killed. He said he'll try again when the Legislature meets in January, and may consider tying the tax to faster-rising construction costs.

As Krusee has been a toll toad champion of late, I share Eye on Williamson's skepticism about his commitment to non-toll alternatives. Perhaps his close shave in this year's election had a salutary effect. We'll see.

Posted by Charles Kuffner on December 12, 2006 to Planes, Trains, and Automobiles | TrackBack


TTI's David Ellis speaks with the Transportation Committee in the video above, and reveals that tolls are not needed at all:

ďThe states portion of the problem, can be solved by borrowing against an index, JUST THE INDEX COMPONENT OF THE GAS TAX. IT'S STAGGERING. I agree with you itís incredible information that we were rather surprised to figure out."


Posted by: Sal Costello on December 12, 2006 11:47 AM