Monday, November 05, 2007

"The fierce arguments in Texas over toll roads are being watched, and increasingly duplicated, in many other states. "

Other states watching to see how Texas pays for roads

November 4, 2007

The Dallas Morning News
Copyright 2007

WASHINGTON – The fierce arguments in Texas over toll roads are being watched, and increasingly duplicated, in many other states, where construction needs are fast outstripping available funds.

Across the country, existing highways are growing more costly to maintain as they age, even as population growth increases pressure for new roads and added lanes.

Construction costs have soared – 62 percent over the past five years in Texas, for instance – as massive building campaigns in China and India gobble up raw materials.

Meanwhile, state and federal gas taxes that pay for construction and maintenance have remained flat since the early 1990s.

Congress last raised the gas tax – by 3 cents a gallon – in 1993, and the Democrats were promptly voted out the following year. In Texas, the rate has been 20 cents per gallon since 1991.

Taken together, the trends suggest that governments at every level soon will have to reduce spending on new construction and spend more to maintain the roads and bridges they already have.

That shift could begin at the federal level as soon as late next year, when revenue from the Federal Highway Trust Fund won't cover projected expenses.

In Texas, it probably will begin next month, Texas Transportation Commission member Ted Houghton told an audience last week at an American Road and Transportation Builders Association conference.

Texas has plenty of company. States across America are scrambling to keep their growing traffic moving and their aging roads and bridges safe – often with fewer and fewer resources.

"It's a crisis, we all agree on that," said Jack Schenendorf, vice chairman of a 12-person bipartisan commission led by U.S. Secretary of Transportation Mary Peters that is charged with completely rethinking America's highway construction. "The fundamental problem is we're simply not spending enough money on our infrastructure. At the federal level, there is a lack of vision and no mission."

But few people seem to agree on who should pay for increased spending on infrastructure.

Should the federal government – or any government, for that matter – retain its central planning role in building the nation's highway network? Or is Sen. Kay Bailey Hutchison right when she says that the federal system is already built out, and therefore states should be given the primary responsibility for new roads?

Only when those questions are answered, Mr. Schenendorf said, can the real fights over how the money will be raised – by taxes or by tolls – be resolved.

But as the federal government studies how to shape the future of the system, battle lines are being drawn in states all over the country.

Texas, especially, is seen as a bellwether – and many bankers and businessmen at the conference said last week that they were watching the Lone Star State closely.

"I don't know if there is another state out there that has shown greater leadership on this issue than the state of Texas," said John Horsley, a former Clinton administration official in the Transportation Department. He now heads the national association of state highway department officials.

Bob Poole, transportation expert at the Reason Foundation – a libertarian think tank – and a staunch advocate for letting private business build toll roads, said the fight that began in the last session of the Texas Legislature has only just begun.

The Legislature passed a partial moratorium on private financing of toll roads this year. The real impact won't be known until 2009, he said, when the Legislature meets again.

"SB 792 is a reality," said Mr. Poole, referring to the approved legislation. "It's a setback, but it's not the end of the world" for private investment in Texas roads.

Others with a more direct interest in the legislation agreed.

"I read SB 792 about 12 times," said Klaus "Sonny" Brown of Zachry Construction Co., an international company based in San Antonio that is eager to build toll roads in Texas. "Happily, it was Swiss-cheesed with loopholes. [But] I read it to find out whether I still had a business or not."

For his part, Mr. Houghton accused the Legislature of "slamming the brakes on" the state's campaign to fix its gridlock problem. Nevertheless, he said, Texas has plans to toll 80 or more projects – many of which could be offered to private-sector bids – in the next few years.

Those plans are important to North Texas, according to Michael Morris of the North Central Texas Council of Governments. If gas taxes aren't raised significantly, new roads in the Dallas area are going to be tolled, or probably won't be built, Mr. Morris said.

One example will begin taking shape early next year. Private firms will bid for the right to build six new lanes on LBJ Freeway – and then have decades to collect high-priced tolls from drivers. The rates could be as high as 75 cents a mile during peak times, but the existing lanes will remain free.

That's the model other states are looking to as well – and they are hoping to learn from Texas.

In Georgia, home to Atlanta and the second-most-congested traffic in America, officials are scrambling to follow Texas' lead, said Earl Mahfuz, treasurer of the Georgia Department of Transportation.

"We beg, borrow and steal ideas wherever we can get them," Mr. Mahfuz said last week. "And we see a lot to learn from in Texas."

Georgia has hired teams of advisers and plans to use tolls – and private investors – for many of its largest highway projects, including a possible tunnel under the city of Atlanta.

One lesson from Texas, he said: Georgia plans to involve legislators earlier on big projects, hoping to avoid the kind of backlash seen in Texas this year.

But one way or another, he said, the old way of building roads is no longer sufficient.

"We used to have a program we called Congestion Relief," he said. "We have learned that that is no longer even possible. The best we can hope for is mobility, a guaranteed commute along specific corridors, for those who want to pay for it."

Free roads – which officials like Mr. Mahfuz and Mr. Houghton like to say were never really free – are quickly going extinct, he said.

Mr. Schenendorf is still pulling for an increased role from the federal government. His commission will issue a report late this year, and it is expected to lay the groundwork for the battle in Congress over the next major transportation policy bill – due in 2009.

He said voters would prefer to pay more gas taxes than see steadily increasing toll rates.

U.S. Rep. Eddie Bernice Johnson, D-Dallas, agrees, though she said it's unclear how voters would react.

But Mr. Houghton scoffed at the idea that Congress would ever be willing to raise the gas tax enough to make tolls and private investors unnecessary.

"Texas would need an increase of 80 cents or more to meet its needs," he said. "That's not going to happen."

© 2007 The Dallas Morning News Co

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