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To toll or not to toll

Former TxDOT Commissioner and current State Sen. Robert Nichols explains his shift in thinking on toll roads. Basically, he does not favor the no-compete clauses, which he did not think would be a part of the deal for the Trans Texas Corridor.

When the Transportation Commission announced the proposed corridor along I-35 in 2004, both Cintra-Zachary, the company chosen to build the system, and the Transportation Commission publicly stated there would be no “no-compete” clause in the contract.

Fast-forward a few years later and reality is like a cold glass of water in the face. With few exceptions, the Cintra contract contains a noncompete clause stating no alternative roads can be built within miles of either side of the toll road for 50 years without paying penalties. Many similar contracts are being negotiated that would give private companies exclusive rights to many-mile wide areas of land in Texas’ highest growth areas.

Put simply, the state is enacting a policy that forces Texans to drive on a toll road with very few alternatives. In high-growth areas, the private toll operator would be free to increase tolls as demand for the road increases. New road construction by the state would be penalized, thereby setting up a classic monopoly, agreed to by the state, forcing Texans to pay ever-increasing tolls. There should be incentives to relieve congestion, not penalties.

[…]

I filed Senate Bill 1267 to place a two-year moratorium on private equity toll projects. Toll roads can be built in the interim by the local authority or TXDOT; however, the government may not contract with a private company to operate toll roads until the Legislature ensures adequate protections are in place.

Nichols doesn’t address the issue of the state’s frozen-since-1991 gas tax, which is a big part of the problem here. Say what you will about Sen. Carona and his flipflop on SB 1267, at least he recognizes that raising the gas tax is a viable option.

Still, Nichols’ position is much more honest than that of his op-ed page counterpart, who loses credibility early on:

There is so much misinformation being spewed in the halls of Austin that years of Texas’ work and billions in private capital for much-needed highway projects could be lost as state lawmakers push a two-year moratorium on public-private partnerships.

[…]

The Texas Department of Transportation is short $86 billion it needs to meet its congestion reduction goals as the state Texas adds another 13 million residents over the next two decades.

Of course, as the Texas Transportation Institute study from last year documented, that $86 billion figure is based on wild exaggeration. You’d think someone who makes charges about spewed misinformation would be more careful about this sort of thing, but apparently not.

Honestly, I just don’t get the reluctance to at least talk about the gas tax. Raising it by the 12 cents recommended by the TTI as a way of paying for all of TxDOT’s real future needs just won’t have that big an impact on most people – you’d have to use over 40 gallons of gas a week to be charged an extra $5 a week in gas taxes. It will hit businesses harder, and it will be a sizeable burden on school districts, but these things can be addressed. We can’t get anywhere on this if we don’t at least talk about all of the possibilities. People have come to realize that the all-toll-road, all-the-time solution is deeply flawed. It’s time to take the next step and figure out a better way forward.

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2 Comments

  1. Trafficnerd says:

    In a meeting with TxDOT representatives a couple years back, where they were were describing the CDA process to a bunch of us consultants, TxDOT firmly declared that there would be no non-compete clauses in the contracts.

    That of course has turned out to be completely untrue.

  2. Sal Costello says:

    PRIVATIZING AND TOLLING FREEWAYS IS A COSTLY DEAD END.

    Under the guise of traffic congestion relief, the largest taxpayer fleecing in Texas history is now underway.

    Elected officials are selling off our assets – our public highways, such as State Highway 121 in Dallas – in a desperate attempt to raise quick cash to build more toll roads.

    SH 121 in Dallas is the first freeway in Texas to be sold off. In exchange for a one-time payment, Cintra, a foreign toll road corporation, will charge a toll for the only expressway for miles. Cintra will profit from this monopoly and raise the toll tax rate for 50 years.

    Selling our roads today will equal crippling toll rates and more traffic congestion tomorrow. Just ask California.

    The first and only other freeway to tollway conversion in the history of the U.S. was California’s US 91 deal in the 1990’s. A noncompete clause, similar to Cintra’s deal for SH 121, kept California from increasing highway capacity on nearby roads. And, after seven years of increased traffic congestion and public unrest, it cost California taxpayers $207.5 million more to buy back US 91. Today, the toll rate on US 91 continues to increase and traffic congestion is worse than ever.

    Recently, our legislature has been focused on a two-year moratorium that would temporarily halt private toll road deals like SH 121. The moratorium is now veto proof with over two thirds of both the Texas house and the senate on board. Sadly, the moratorium has been a distraction. The fact is voters were never asked if our freeways should be converted to tollways in the first place.

    The real question should be whether we toll freeways or index the gas tax – not whether private companies or our own government should implement a new double tax.

    When a freeway is tolled, crucial expressways are not offered as an alternative. In contrast, conventional toll roads in the U.S. are fair, since drivers are offered a freeway as an alternative. With freeway tolls – drivers are forced to drive frontage roads with stoplights and deal with growing traffic congestion if they don’t pay the toll. The unfortunate truth is this: there is a financial incentive to NOT address traffic congestion on freeway toll roads since increased traffic congestion provides higher revenues.

    The freeway toll cash cow is a severe departure for TxDOT. This should be a major concern of and taxpayer, since TxDOT’s focus has always been solving transportation issues – not generating revenue through traffic congestion.

    Freeway tolls create monopolies and are the most expensive solution for collecting a tax. According to TxDOT, it costs about 25 cents to collect a cash toll and 11 cents to collect an electronic toll. So, if the toll tax for a short span of road is 50 cents, 50% of the cash paid for that toll goes to collect the toll.

    The solution is simple, instead of spending our limited tax dollars (and right of way) intended for free roads on toll roads – index the gas tax to inflation as numerous other states already have. Nearly everything we purchase has an indexed tax – a fair form of taxation.

    Assuming your vehicle gets 20 miles per gallon and the increase in indexed gas tax was 10 cents a gallon, you would spend less than .5 cent a mile for an indexed gas tax. Compare that to the 15-cent per mile toll road that would cost 30 times the indexed gas tax per mile. A 20-cent per mile toll would cost 40 times the indexed gas tax, and so on.

    Based on the recent Texas Transportation Institute report, indexing the gas tax and placing the incremental revenue in the mobility fund to pay off bonds allows us to build the roads we need now without more toll roads. Void of added bureaucracy and new layers of corruption, indexing the gas tax is the simplest and smartest solution.