Saturday, December 09, 2006

Texas Transportation Institute study throws cold water on a long-cherished claim of toll road advocates

Toll road argument thrown into doubt


Patrick Driscoll
San Antonio Express-News
Copyright 2006

A new study throws cold water on a long-cherished claim of toll road advocates, surprising some of them, and could redefine a debate over if and how Texas should toll its highways.
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.

Toll critics embraced the news, saying it's proof TxDOT is pumping up numbers to justify toll roads.

"All of this is a charade to draw us into TxDOT's pointy-headed policy mindset that's obsessed with tolls and how to sell the public on it," said David Ramos of San Antonio Toll Party. "The bottom line is TxDOT is trying to create a crisis to justify their money grab."

Toll advocates were caught off guard when the TTI study was recently presented to the Legislature's Study Commission on Transportation Financing.

"That report was a surprise," said Ted Houghton, a Texas Transportation Commission member from El Paso who serves on the study commission. "It wasn't on the agenda and no one had any time to read it. So we're going through it and working on the assumptions."

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."

That included meeting with TxDOT and the governor's office after a draft quietly came out in September, he said.

Houghton said TxDOT is poring over the report and could respond next week.

State officials might question estimates for construction inflation, which is rising faster than consumer inflation.

Road building costs in Texas went up 33 percent last year because of higher fuel costs and increased global competition for asphalt, concrete and steel.

The study predicts construction inflation will go up just 3.4 percent a year.

Other issues could involve whether costs such as road maintenance were included.

Also, Houghton said indexing the gas tax to construction inflation could cause the tax go up faster than many realize — rising to 84.4 cents a gallon by 2030 or even a $1 or more, depending on the scenario — and would hit poor people the hardest.

"It's the most regressive tax there is," he said.

While the study doesn't recommend scrapping statewide toll plans, it does say toll dollars should stay in local areas and that the gas tax should be indexed to inflation to finance bonds.

It also calls for an end to diverting gas tax revenues to non-transportation uses.

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.

The legislative study commission also will offer ideas, but a report will be held off at least another month while members mull the TTI gas-tax study.

"The study has thrown a kink into the process," Krusee said.

© 2006 San Antonio Express-News: