This makes sense to me.
Commissioners Court on Tuesday voted to create a local government corporation to manage Harris County’s toll road system in a move expected to provide a windfall to county coffers and allow surplus toll collections to be spent on non-transportation purposes.
Approved by a 3-2 vote along party lines, the local government model would allow the Harris County Toll Road Authority to refinance its debt at historically low rates and divert funds to help the county respond to the COVID-19 pandemic and subsequent economic downturn, and invest more in flood control, supporters said.
Under the proposal by new Budget Director David Berry, the county will receive a $300 million lump sum in toll revenue and then $90 million annually from the system. The toll road authority collected $901 million in the fiscal year that ended in February.
Peter Key, interim executive director of HCTRA, urged the court in a memo to adopt the new governance model.
“This is an unprecedented situation that presents unique financial challenges for the county and may require additional levels of financial support for the county to effectively respond to these challenges for the foreseeable future,” Key wrote.
The toll road authority’s current bond indenture and state law limit the use of surplus revenues to non-toll roads, streets, highways and related facilities, according to a Q&A created by the county budget office. After refinancing under the new governance structure, HCTRA revenues can be used by other county departments.
The proposal would not affect toll rates, the budget office said, nor would it privatize the system or sell off any assets.
While Fort Bend, Brazoria and Montgomery Counties use local government corporations to finance and operate their toll roads, Harris County’s will serve as a financing vehicle only. The toll road authority estimates Harris County will save $60 million by refinancing the system’s roughly $2.7 billion debt at lower rates through the corporation.
County Judge Lina Hidalgo said she supported the idea because the county can “maximize every dollar” in a challenging fiscal environment.
Precinct 1 Commissioner Rodney Ellis said diverting some toll revenues would be an effective way to boost flood control spending. It also could be used as matching funds to state or federal appropriations on ambitious capital projects like deepening the Houston Ship Channel.
I’m fine with this. If the toll roads are generating more revenue than is needed to operate and maintain the roads, then sure, let’s use some of that money for other necessary purposes. Flood control would be high on my list, but other capital projects make sense, too. Commissioners Court will still be accountable for all this, as they currently comprise the board of this LGC, and they will be responsible for appointing subsequent board members. Let’s put this revenue to some good use.
(You may say, if the toll roads were bringing in such excess revenue, we should have cut toll rates. I say that’s a policy choice, and my preferred policy would be to do something like this instead. Lowering tolls is pretty far down on my priority list. Your mileage may vary.)
In the “Would you like some cheese with that whine?” department:
Both Republican commissioners voted against the proposal. Jack Cagle in Precinct 4 lamented the fact that there had been no public meetings on the topic before Tuesday’s vote, unlike the extensive campaign in the summer of 2018 seeking support for the $2.5 billion flood bond program.
Precinct 3’s Steve Radack derided the idea as a ploy by the court’s Democrats who, in his view, are looking to siphon money from the toll road authority instead of asking taxpayers for more.
“This is a money grab,” Radack said. “They’re going to use it to pay for things that are normally paid for via (property) taxes.”
Hey, remember when Commissioners Radack and Cagle broke quorum to prevent the democratically-elected majority on Commissioners Court from voting on a property tax rate hike that was intended to cover future downturns in revenue resulting from COVID-19 and the state’s rigid new revenue cap? Good times, good times. Maybe let the majority vote on its policies next time, and campaign against them on the places where you have disagreements? Just a suggestion.