December 01, 2006

Reality and toll roads...what you need to know

Tolls are a derisive issue and they really shouldn't be. The problem is a perception that tolls are somehow cheaper/will do more/create jobs/will bring on the second coming of Christ. The reality is that toll roads are, at best, nothing more than corporate welfare for large construction companies at the expense of public infrastructure and at worst, a massive, inequitable tax increase.

I'm not going to say you're an idiot for thinking tolls are a good idea. I'm going to say you're very misinformed. I actually know the math and economics (far better than most of the analysts... I used to work in risk management for a commodities trading firm, this stuff is a cake walk).

  • Ray Perryman runs a 'consulting company' in Waco. His primary duty seems to be analyzing the TTC and then pimping the shit out of it. To whit, he published this recently in the Waco Trib. Ray is a real master of the obvious who spends most of his time talking about how vital roads are to our economy. No shit, MOTO. The problems people have with the TTC (and which Ray doesn't seem to get... I guess, when you're paid to generate a report on the TTC, you kinda tend to gloss over the bad stuff) are manifold:

    1) The use of eminent domain to take property from landowners (VERY productive agricultural land) and hand it over as part of a leasehold to a foreign company.

    2) More expensive than a statewide gas tax increase

    3) the 'innovative public-private partnerships' are not really innovative or new. The only thing innovative about it is that Republicans have found a new way to funnel public money to private companies.

    You'll notice Ray doesn't really point out any of this and instead focuses on the economic impact of the TTC while failing to mention that ANY expansion of infrastructure in the 35 corridor will have a similar (or greater) economic impact. Either Ray doesn't want to acknowledge that, or he just doesn't see it. That makes him untrustworthy at best.

  • I mentioned the gas tax above... let's keep in mind that it hasn't been increased in more than a decade. During that time, usage of public infrastructure has risen dramatically. Here's a really simple way of looking at this... When I first set up my wireless network, I had one internet connection and usually just one computer online. I now have three, sometimes four computers running at the same time on my DSL line. It is obviously beginning to slow down a little, just like a freeway does when more people drive on it. SO, I had to invest in a second line just like we are now having to invest to expand our transportation infrastructure. Now, what makes more sense? To do it with tax dollars or Tolltax dollars? Even the most simplistic analysis (from me) and a good one (from EOW and Kuffner) shows that taxes are the way to go to keep the costs low for ALL consumers.
  • While we're talking about TXDoT's hyperinflated numbers for gas taxes (like 17 cents for Austin, 40 cents for SA Metro), let's keep in mind that those numbers include profits for a private developer over DECADES as well as a massive bond outlay in the 2040's. In short, they are dramatically inflated. In reality, the gax tax increase would be much cheaper (10 cents statewide).
  • Let's not forget the rosy projections that certain toll road analysts did in CO. Let's also not forget some of these same folks have been used by the Lege to justify their poor decision making.

    In “Roads to riches”, reporter Chuck Plunkett looks at 23 new turnpike projects nationwide, and discovers that in the vast majority of cases, the traffic and revenue estimates were wildly exaggerated.
  • Let's go back to Ray's column for a second. Infrastructure expansion is vital to the growth of the economy here in Texas. IN ALL REGIONS OF TEXAS. The urban areas will benefit from freeways to the suburbs, just as the rural areas will benefit. I live in Austin, however I have business in Round Rock, Georgetown and San Antonio at least once a week. I need to be able to get there quickly and safely. This will allow me to do my job, make very good money and pay my property and city sales taxes (Not to mention getting people out of the city faster makes my driving MUCH more pleasent). The one other thing you have to think about it is how much money is available in an economy. If a gas tax increase was put into effect it would have a relatively minor effect on consumers. Tolls, on the other hand are much more expensive and will force the people who pay them to spend less on other things. The reduces sales taxes and will end up hurting local economies. Reality is reality... what helps others is likely to help me (and you) as well.
  • And finally...

  • Paul Burka of Texas Monthly may be the first member of the MSM to actually get what a bad deal the TTC in particular and tolls in general ARE for Texans.

    He tells a great story of how our state government has ceded control of our transportation future to corporations, foreign and domestic. He quotes Sen. John Carona (R - Dallas), Chair of the Senate Committee on Transportation & Homeland Security, as saying this about CDA’s, “Within thrity years’ time, under existing comprehensive development agreements, we’ll bring free roads in this state to a condition of ruin.” Burka explains brilliantly here:

    The private companies that will build and operate the toll roads are in business to make a profit. In order to ensure that profit, they must have people who want to drive on their roads. And - here’s the rub - in order to be sure that people will want to drive on their roads, the CDAs with TxDOT will contain non-compete clauses that prohibit TxDOT from building new roads or upgrading existing highways. Any improvement to an existing highway that is not already planned at the time TxDOT enters into the contract is prohibited. That billion-dollar concession limits TxDOT’s ability to improve nearby secondary roads. How about adding extra lanes? Sorry, prohibited by the CDA. An HOV express lane? Not a chance. This is why Carona says that free roads will be reduced to ruin. TxDOT will no longer be able to respond to the transportation needs of the state, other than to say: If you don’t like the traffic, use the toll road.


  • It's time to make some decisions about transportation and the future of this state. None of them need to involve toll roads. They are a bad idea from every perspective.

    (MAD props to both EOW and Kuffner)

    Posted by mcblogger at December 1, 2006 09:02 AM

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