'Independent ' audit of TxDOT by P3 boosters Deloitte and Dye says more private toll roads are needed.
An audit for the Texas Department of Transportation finds that the state's best chance for keeping up with demand for new and improved roads is to build more toll roads with higher fees.
Dye Management Group and Deloitte Consulting performed the audit for the state. Among its other recommendations is that the state replace the existing gasoline tax with a fee based on miles traveled per vehicle.
The 20-cents-per-gallon gasoline tax has traditionally paid for roads. But the audit says it's no longer adequate to the task, partly because of high construction costs and cars with better gas mileage.
The audit cost more than three-and-a-half (M) million dollars. It was presented to the Texas Transportation Commission yesterday as part of the agency's sunset review. That's a comprehensive assessment that state agencies go through every 12 years.
Commissioner Ted Houghton of El Paso supported idea of higher toll rates. He says tolls that only cover construction and operating costs should be increased to produce funds for building other roads, he said.
© 2007 Emmis Austin Radio Broadcasting Company
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Audit urges more tolls for Texas drivers
July 19, 2007
AUSTIN — The state's best chance for keeping up with demand for new and improved roads is to build more toll roads with higher fees, according to an external audit of the Texas Department of Transportation.
Among other recommendations, the audit by Dye Management Group and Deloitte Consulting suggests the state replace the existing gasoline tax with a fee based on miles traveled per vehicle.
The 20-cents-per-gallon gasoline tax, which has traditionally paid for roads, is no longer adequate, partly because of high construction costs and cars with better gas mileage, according to the audit.
"Right now, toll rates are set at the lowest possible level, just enough to capture the costs of the roads themselves," consultant Peter Mills said. "We believe they should be priced to reflect the value — including the time saved — they bring to the drivers who use them."
The audit, which has cost more than $3.5 million, was presented to the Texas Transportation Commission on Wednesday. It's part of the agency's sunset review — a comprehensive assessment that state agencies go through every 12 years.
The audits and recommendations will be completed by the end of July and will be used as a starting point for a Sunset Advisory Commission study of new laws for the transportation department. The Legislature will consider the resulting proposals when it reconvenes in 2009.
Commissioner Ted Houghton of El Paso supported idea of higher toll rates. Tolls that only cover construction and operating costs should be increased to produce funds for building other roads, he said.
© 2007 The Associated Press:
Texas' tolls too low, new audit says
Independent report buttresses Department of Transportation's claims about funding shortfall and the need for private tollways.
July 19, 2007
By Ben Wear
An independent audit released in draft form Wednesday buttressed the view of Gov. Rick Perry and his transportation lieutenant, Ric Williamson, that toll roads, including those built and operated by private companies, must be a key piece of addressing the state's highway needs.
Moreover, the audit by Dye Management Group Inc., said that, in general, toll rates on Texas turnpikes are too low, set simply to cover costs rather than generate surplus revenue, and should be raised.
"Toll facilities in Texas are generally underpriced," according to the executive summary of the Dye group's audit on transportation funding. "Local toll authorities face incentives to charge tolls that are as low as possible. . . . The tolls charged by local authorities are lower than studies indicate that their customers would be willing to pay."
The Dye audit is one of five commissioned by the Texas Department of Transportation as part of the "sunset review" of the agency scheduled over the next two years. State law requires comprehensive studies of each agency every dozen years and mandates such audits.
Response to the agency's solicitation for auditors was light. Dye, based in Bellevue, Wash., and founded in 1990, was the only company to bid on the transportation funding audit.
The agency and its leaders, particularly Williamson, the Texas Transportation Commission chairman, are coming off a rough few months during which lawmakers questioned the aggressive turn toward the private sector for tollways.
The agency, based on its 2004 estimates, had said that the state would be $86 billion short of what it needs for transportation projects between now and 2030 and that private capital is critical to closing that gap.
A private report released last fall indicated that much of the shortfall could be closed with an increase in the gasoline tax, but the Legislature did not seriously consider raising the 20-cents-a-gallon levy.
Lawmakers, particularly those from Dallas and Houston, made it clear that they — and their constituents — would prefer that government, not the private sector, run whatever tollways are deemed necessary.
Dye's report, which does not take into account legislation passed in the spring that places minor limits on private toll roads, estimated that gasoline taxes over the next generation will raise $15 billion less than the agency's 2004 estimate showed. Even with $30 billion in tollway revenue, $5 billion of that from private tollway leases, the audit put total revenue through 2030 at $117 billion.
That is $71 billion less than what the agency estimates is needed.
Williamson and his commission colleagues clearly relished what the audit had to say.
"I feel real bad about people who spoke out of ignorance over the last six months," Williamson said.
State Sen. John Carona, R-Dallas, chairman of the Senate transportation committee and a frequent critic of Transportation Department policies, had not read the audit and had no comment for now, a spokesman said.
© 2007 Austin American-Statesman
TxDOT could bump tolls to improve roads
N. Texas could feel effect if state heeds audit's call for more, higher fees
July 18, 2007
By MICHAEL A. LINDENBERGER
The Dallas Morning News
AUSTIN – Texas needs more toll roads, and drivers should pay more to use them, an external audit of the Texas Department of Transportation suggested Wednesday.
Sharply increased highway construction costs and cars that use less gas are two factors among several that mean the traditional means of paying for roads – the 20-cents-per-gallon gasoline tax – is no longer sufficient, the auditors said.
Therefore, more toll roads with higher fees have become the state's best hope for keeping up with demand for new or improved roads, said consultant Peter Mills of Washington state-based Dye Management Group Inc.
"Right now, toll rates are set at the lowest possible level, just enough to capture the costs of the roads themselves," Mr. Mills said. "We believe they should be priced to reflect the value – including the time saved – they bring to the drivers who use them."
New ways for the highways
- Replace the current 20-cents-per-gallon gasoline tax with a fee based on miles traveled per vehicle.
- Eliminate user fees charged by county tax assessors to drivers who use the Internet to renew vehicle registration.
- Explore ways to reduce the number of identifying tags drivers must place on their vehicles, such as the proof of registration, inspection or toll tags now displayed on windshields.
- Consolidate TxDOT call centers to create a single number for residents to call for all inquiries about travel and tourism, driver's licensing, vehicle registration and related concerns.
- Recruit department staff who have advanced skills in developing partnerships with private companies to increase the number of projects that feature private investment.
- Increase the frequency with which TxDOT evaluates the quality and efficiency of its contractors.
The comprehensive audits are required by law as a prelude to the top-to-bottom assessment of the agency, known as a sunset review. Every agency undergoes such a review every 12 years. TxDOT will be under scrutiny between now and the next regular session of the Texas Legislature in 2009.
Motorists probably will pay much more to drive in North Texas if the consultants' more aggressive pricing philosophy is adopted.
Mr. Mills told commissioners that the North Texas Tollway Authority, for instance, typically has set rates at about 10 cents a mile. The toll roads actually are worth about 16 cents a mile to motorists who use them, he said, adding that therefore the tolls should be set at that level.
The 16-cents-a-mile scenario would mean that the toll on the Bush Turnpike between U.S. Highway 75 and Interstate 35E would jump from the current $1.50 to $2.40, NTTA spokesman Sam Lopez said.
Commissioner Ted Houghton of El Paso expressed support for the higher rates, saying that tolls that cover only construction and operating costs should be increased to produce profits that could help finance other badly needed roads.
"They're basically being subsidized," especially since TxDOT often provides some funds to help bring down the cost of building the roads, Mr. Houghton said during the meeting.
Higher rates already are on the way with some new toll roads. For example, tolls on State Highway 121 in Collin and Denton counties are expected to be set at 14 cents a mile.
Mr. Mills also suggested commissioners and lawmakers explore possible compromises over whether toll roads should be built and operated by public or private entities.
Toll projects are cheaper, according to the audit, when equity is used to reduce the amount of debt used to finance the roads. But that equity can come from public sources just as easily as from private investors, he said.
Mr. Mills urged the commission to work with lawmakers to create a public corporation that could compete to invest public dollars as equity in toll projects. The public company could be funded by TxDOT itself or by other sources, such as the Texas teachers' retirement fund, he said.
Commission Chairman Ric Williamson said he and others have been lobbying for support to do just that, but have so far found few takers in the Legislature.
The TxDOT audit recommendations are very preliminary. Here's the process:
- The audits and recommendations will be finalized by the end of July.
- A Sunset Advisory Commission made up of state representatives, state senators and private citizens will use the audits as a starting point for recommending new laws for TxDOT.
- The sunset commission will hold public hearings and ultimately develop a legislative bill reauthorizing TxDOT as a state agency.
- The Legislature reconvenes in January 2009 and will consider passage of the reauthorization bill or other new laws pertaining to TxDOT.
© 2007 The Dallas Morning News Co
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