Monday, July 11, 2005

High gas prices make toll roads look even less attractive

Have gas prices reached a tipping point?

July 11, 2005

Ben Wear

Austin American-Statesman Copyright 2005

It took a while, but $2-plus gasoline finally seems to be cooling the passion we Americans have for internal combustion.

According to the Federal Highway Commission's latest monthly report, the total number of miles driven in the United States fell in April for the second month in a row. The 1.3 percent dropoff in April — the comparisons are made to the same month a year previous — comes on the heels of a half-percent drop in March.

The two-month "trend," if it can be cautiously called that, could signal an end to 10 months of dithering by American drivers, a period that roughly coincides with gasoline prices hitting the $2-a-gallon level in April 2004 and sustaining that altitude.

From May 2004 to February, driving was up over the previous year in six of those months and down in four.

Maybe we thought it was temporary, that OPEC or the Octane Fairy would make it all go away.

But as oil and gasoline prices remained high and then climbed higher still this spring, SUV sales slumped, and now, the numbers indicate, actual driving behavior is changing.

Especially in Texas.

The number of miles driven in Texas — the federal calculation is based on 4,000 monitoring stations nationwide — was down 3.2 percent in April, making us one of 34 states to see a decrease. Oklahoma saw the greatest decline, with a 5.2 percent drop.

Texas gasoline tax receipts have been down in nine of the past 12 months, including the past four. That's $17.8 million lower than the previous year, small in the context of a $7.5 billion annual Texas Department of Transportation budget but disturbing nonetheless.

All this shouldn't come as a surprise.

Surely, many of you have had some of these experiences in recent months: the partial fill-up because regular is at $2.12 rather than, say, $2.04; the crosstown errand put off because, after all, that's a $2 trip; the Hill Country jaunt not taken to save $10 in gas.

This sudden aversion to ignition could have profound public policy implications.

Not only does it mean less state and federal gas tax revenue, money that supports highway building and maintenance, but it could also sabotage the alternative: toll roads.

Much of the money for tollways, whether it's the state building them or a private partnership such as Cintra-Zachry on the Trans-Texas Corridor, comes from borrowing on the bond market.

Fewer cars mean lower revenue, or higher tolls, which can mean still fewer cars.

Bond documents for the three-road Central Texas Turnpike Project say that the revenue forecasts assumed prices at the pump would not exceed $2.50 a gallon. Investors already have rolled the dice on those roads.

But Gov. Rick Perry's Trans-Texas Corridor of intrastate tollways is still just lines on a map. Will investors play ball in a $3-a-gallon environment?

Let's hope we don't have to find out.

Austin American-Statesman: